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UNCOVERED PUT and CALL OPTION WRITING
CALCULATION EXAMPLES
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The following is an actual uncovered put and call combination writing transaction on 10 put and 10 call contracts (equivalent to 1,000 shares each) of the PowerShares QQQ (symbol QQQQ) out-of-the-money puts and calls. These tables were taken from the Excel template provided with each copy of Writing Uncovered Put and Call Combinations that can be used to find the best put and call option combination writing opportunities.
SEC.
SYM.

EXPIR.
DATE
STRIKE
PRICE
# OF
DAYS
PREM.
%
ANNUAL
RETURN
NET
PREM.
INC.
$35.00

10

16-Jul

$37.00

   53
  
QQQGK
$0.50

    34.43%



# OF
CONT.
SEC.
PRICE
PREM.
INTRIN.
VALUE
PREM.
TIME
VALUE
MARGIN
REQUIRE.
PREM.
INCOME
$
RTN. OF
CAPITAL
$0.00

$10,000



$500

$0

$500

$0.50

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CALLS
PUTS
QAVSG
16-Jul

10

$35.00

$33.00

$0.65

$0.00

$0.65

$10,000



   53
  
$650

$0

$650

    44.76%



ADDITIONAL FIRST CONTRACT MARGIN ------------------------------------------------------------------------>         $0

TOTAL MARGIN NEEDED TO SUPPORT THIS COMBINATION TRANSACTION ------------------------->     $10,000
COMBINED ANNUAL % RETURN ------------------------------------------------------------------------------------>      79.20%
COMBINED TRANSACTION INCOME ------------------------------------------------------------------------------->       $1,150
Note: Commissions have not been applied to the above transactions, as commission schedules for different brokers vary widely. The software templates provided with the book allow you to enter your applicable commission schedule(s) into the templates for accurate calculations. The income and annualized yield calculations in the above examples would be reduced slightly if commissions were applied.