Relative Value Trades

[Brad De Long]

>
>Here's a technique that is only for the strong-stomached &
>well-capitalized: sell call options naked (i.e., without owning the
>underlying stock) against, say, the Philadelphia exchange's Internet (DOT)
>index. If the market goes against you, roll up (sell the next higher strike
>price) and double your position. If it goes against you, roll up & double
>again. Sooner or later, the market will go your way, and you'll pocket all
>the call premium. Of course, you may be on the hook for about $4 billion if
>this continues...
>
>Doug

Ah, a relative value trade. Opening an office in Greenwich?

Brad DeLong