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Technology Stocks : Safeguard Scientifics SFE

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To: Tom Bunge who wrote (2872)5/18/1999 5:41:00 PM
From: kcmike   of 4467
 
Tom,

I have used this strategy as well. It does have an "automatic" downside risk, in that the most you can lose is your premium, even if the stock falls below the strike price. However, you would probably have gotten out of the stock anyway if it drops that much.

It does have an effect on your margin account as you stated. If you do any naked option writing, you need a certain amount of equity to execute the trades, and any option values do not count.

I have done somewhat as you though with SFE and SWS.

I am interested in Mr. Potter's take on this as well.

Mike
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