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Technology Stocks : America On-Line: will it survive ...?
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To: yard_man who wrote (3128)5/15/1997 3:14:00 PM
From: chenys   of 13594
 
Barry: I was trying to learn something from you. I did not understand your example exactly. Did you get it and then it went south and then you sold put to open? In that case, I understand. That is equivalently to doubling your bet to certain extent. But that would also tie up your buying power, wouldn't it? Because they would put aside the cash in case your naked put got execised early. I have used your strategy on MNPI before CPQ's buyout. I was conservative and sold a July put @2.5 for atrike of 10 while it was at 8 something.
Then it shoot up to 16 in a few days. If I only know it'd happen so soon I'd have used higher strike price.

However, this was done for averge-down purpose. The reason I used strike 10 on MNPI was because of $1 time value that I thought was a for sure win. But then you lose out by winning much less. Did I get you right?
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