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I'm new to the world of Options and have a question that's been lingering in my mind...

I've got a SEP/IRA account with my broker that's comfortably diverse in that I'm not concentrated on one stock. Unfortunately, all I can do as far as options are concerned is sell covered calls. I also have a margin account with the same broker that I'm using to get my feet wet with options.

Ok, now the question: If I decide to invest in only one stock in my SEP/IRA account and buy a bunch of at-the-money puts in my margin account to cover the same number of shares, I have a synthetic straddle.

Just to be more specific, I've done this with TTEC. Their earnings report is coming out on 2/19, traded at 25.98 and I bought the April 25 puts for 1.40. This was all done a few days ago, so the prices are different now.

If TTEC comes out with earnings that pleases the public, the stock may have a nice rise and the puts expire worthless. The purchase of the puts are offset provided the stock rises above 27.38 or (1.4 + 25.98).

If they disappoint, the stock may drop and my puts recoups that which the stock loses, provided the stock goes below 22.62 or 25-(25.98-25 +1.4). To boot, I get the funds "transferred" to my margin account without the 10% premature withdrawal penalty fee.

If TTEC comes out with lukewarm earnings, the stock doesn't move and the puts expire worthless. Nothing happens and, most importantly, I get to sleep at night stress free.

Does that sound about right?
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