Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 213.29

0.0%

Jan 2 9:30 AM EST

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To: Gary Korn who wrote (14038)	9/23/1997 10:06:00 AM
From: Riskmgmt	of 61433

Gary: Aha, but Glenn would say (I think) that this is a synthetic put. If I were to write a Jan '99 45 put now I would get 13.62 times my stake. That is less gain than on the synthetic put, but it ties up no money in the underlying stock itself. Hmmm...This looks good, doesn't it? My broker wants 30% of the value of the underlying stock as margin if I write(sell) a naked put. As I am on margin most of the time I have to figure the cost of tying up this much capital. So at $38, 10 puts require $11,400 set aside, @ say 8.5% this is about $1,300 over 16 months. Ofcourse, I book the premium from the sale but then I do that if I sell a covered call. I am told by my broker that the 30% is a fed rule,anyone run into this? Ray

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