Wednesday 04-20-05
OEX Bearish Spread

For this bearish spread, we will begin by looking for resistance on the OEX. As it appears to be at $558 we will use a strike price above this level as the strike price we sell ($565). This will allow us a bit of a cushion if the markets head higher.

Second, we will buy a strike price above the one we are to sell or the May $570 calls.

So for this trade we will Sell to Open the May $565 calls at a Limit of $1.40 and Buy to Open the May $570 calls at a limit of $0.80. We will now wait for the May options to run their cycle with the expectation that the OEX will close under $565 On May expiration day.  
Cheers
Mike