America On-Line: will it survive ...? Message Board

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Technology Stocks : America On-Line: will it survive ...?

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To: James F. Hopkins who wrote (3643)	6/27/1997 6:50:00 PM
From: CLAUDE JOHNSON	of 13594

Responding to your query #3643 ... yes its around .3% per quarter, but it's based on the size of your account. You need at least $50k in securities to open such an account to begin with. I did sell the naked Jan 65 calls and Bought the July 65 puts for a net debit of $1.50 per contract. Now its worth a net credit of $7.00 per contract three days later. I did 10 contracts ... that's $5.5k gain in three days! In the money all the way IF you know the way the stock is headed. Incidentally, the margin requirement is between 15%-20% of the total value of the underlying stock at the strike. For the 10 AOL 1/98 calls the req. is to have open margin of $13k. Of course you need to have brokerage approval to do naked transactions. I usually only due naked calls when I spot profitable straddle positions to sell (INTC and MFST right now). But this AOL was a perfect time to take what is better known as a Synthetic Short position through Option trading.

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