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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED
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To: im a survivor who wrote (1762)9/16/2000 2:28:45 PM
From: freeus   of 65232
 
selling puts.....you have the idea exactly.
I guess the question is: do we own stocks or collect premiums?
If I buy 5000 more shares of SSTI at 30 I'm in margin.
If SSTI goes to 15 I'm in trouble. If it goes to 50 or 60 as I think it will, I"m gloriously happy and I sell and have beaucoup bucks.
If I sell 50 puts I have immediate money. I'm not in margin but my margin is "in abeyance"...at least a little of it (less with Brown & Co than Fidelity) while the stock goes through its gyrations on the way through Oct and to Dec-Jan.
Of course my calculations tell me that SSTI has already tanked and will stay in the 28-30 range through the coming pain.
However now that I've pocketed the shares and not bought the stock, if it goes to 50 or 60 in Jan, the puts expire worthless but I don't have the stock so I've only made 5 dollars instead of 20 or 30.
Good luck.
My order did not execute: now I decide for Monday, do I want to buy more on margin or sell the puts a little lower price. Or do nothing?
Freeus
I must admit that this crazy market, up down up down, big up big down is making me think that next time I'm "rich" by my estimation I may be willing to sell EVERYTHING and ONLY sell puts, with the occasional buy of stock with immediate cov calls.
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