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Re: long-term bond YTD return
Old 02-08-2005, 10:26 AM   #41
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Re: long-term bond YTD return

Quote:

Selling a call and buying a put is a synthetic short position. So in that way it is different from the mix you mentioned.

Mikey
Uhhh, nope. Selling a call and buying a put is either a collar or creating s short term bond, depending on whether the strike prices are different or equal.
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Re: long-term bond YTD return
Old 02-08-2005, 11:18 AM   #42
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Re: long-term bond YTD return

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Uhhh, nope. *Selling a call and buying a put is either a collar or creating s short term bond, depending on whether the strike prices are different or equal.
I haven't looked at Gateway's procedures.Thinking about it, they probably but not necessarily are doing covered calls and protective puts. What I said is true in essence if there is no underlying stock. Clearly, it wouldn't exactly mimic a short because of variations in strike etc.- but one's profit-risk graph in each case would show unlimited upside risk above the call strike, with the downside captured south of the put strike. And I suppose I should also say that while a short sale of stock is theoretically open-ended as to time, of course the options are not. Plus blah, blah, blah.

You are corect that by definiton the same option position where the call sold and the put bought are matched by a long stockholding is called a collar, if certain conditions are met.

I am not sure how knowing that helps the original poster answer his question which was "can this be approximated with stocks and bonds".


Mikey
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Re: long-term bond YTD return
Old 02-08-2005, 11:25 AM   #43
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Re: long-term bond YTD return

FWIW, covered call funds seem to be one of the new flavors of the week. I believe several covered call CEFs were launched in the past few months, and the CBOT has started publishing an index of buy and write returns. Pretty gimmicky, if you ask me, although obviously a smart manager could probably deliver attractive returns over time if they were good at picking spots to buy/sell optons.
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Re: long-term bond YTD return
Old 02-08-2005, 01:59 PM   #44
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Re: long-term bond YTD return

Soup,

I found my CD on Vanguard's Bond Desk data base.
You have to have a Vanguard brokerage account
to have access. Inflation indexed CDs are available
on the secondary market occasionally .... I was lucky
(I hope) to find mine. These are generally offered
by LaSalle Bank and Standard Federal Bank. You
won't find new issues at 2% + CPI ..... more like
1.5% + CPI for a 10 year maturity now.

Cheers,

Charlie
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