Short-termSelling Puts (Covered Calls by another name) Message Board

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Strategies & Market Trends : Short-termSelling Puts (Covered Calls by another name)

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To: tuck who wrote (6)	2/4/2006 9:37:16 AM
From: quidditch	Read Replies (3) of 66

I will add one word of caution here: I was selling naked puts quite successfully on an array of tech stocks during 1999 and early 2000, and of course we know what transpired. As portfolio values came crashing down, I was not a happy camper to have put to me a lot of shares of companies that no longer looked so attractive :-( I wonder whether this bull ride in BTs we've been experiencing isn't luring us into a false sense that there is a price floor here that will not, on a broad range of names, be penetrated. What DEW lines do you guys maintain? (Probably too young to know: "distant early warning"). Is there a subjective or quantitative discipline in place which, if breached, you take your losses and fold? Or, are you willing to buy these names and live with them at the indicative strikes irrespective of the tenor of the BT or overall market?

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