68% gain within 20 days..Sell recommended equity

Z

zmostatabi

11/3/05 09:08:54
STRANGLE
BUY +10 INTC 100 APR 06 25 CALL 1.25
BUY +10 INTC 100 APR 06 22.5 PUT .90
DEBIT=2.15


Sell the above recommendation for a gain of 68% within 20 days

SELL +10 INTC 100 APR 06 25 CALL 2.65
SELL +10 INTC 100 APR 06 22.5 PUT .25

Credit=3.15

2.15/3.15= 68%
 
Nice, but your math is off, in 2 ways.

First, you are not computing the % gain correctly. (Hope this is just a fluke, rather than what you routinely do.) If the credit were 3.15 (see below), then % gain would still not be 2.15 / 3.15. Rather, it would be (3.15 - 2.15) / 2.15 = 1.00 / 2.15 = 46.5%.

Second, using your individual option prices (consistent with what I see on my screen), the credit is 2.65 + .25 = 2.90, not 3.15. Then % gain is (2.90 - 2.15) / 2.15 = .75 / 2.15 = 35%.
 
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