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To: Rummenigge
but the initial seller (the issuer) will sell with a fee called spread.

A spread is not a fee.

If the market for an option is 3/4 - 1 1/4, the buyer will pay 1 1/4. Now that he has established his position, whatever he makes will be offset by the seller's loss. Whatever the buyer loses will be offset by the seller's gain.

Think of it as a poker game with only 2 players. One loses, the other gains. And the house takes a little bit off the table anytime the players trade.

54 posted on 01/22/2008 8:58:42 AM PST by Toddsterpatriot (Why are protectionists so bad at math?)
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To: Toddsterpatriot

Think of it as a poker game with only 2 players. One loses, the other gains. And the house takes a little bit off the table anytime the players trade.

yeah - ok - You know that and I know that. It’s a zero sum game until it comes to fees and spreads. The house earns money - that’s why it’s not a zero sum game.

What’s the point of using your brain and creativity for making up misunderstandings ?

You shouldn’t be embarassed when the gold lovers are right at the moment - if plan A fails - you know - plan b is next.


57 posted on 01/23/2008 4:49:26 AM PST by Rummenigge (there are people willing to blow out the light because it casts a shadow)
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