Bill Wexler's Dog Pound Message Board

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Non-Tech : Bill Wexler's Dog Pound

REFR 1.610

+3.6%

Dec 9 3:59 PM EST

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To: Bill Wexler who wrote (851)	4/28/1999 10:38:00 AM
From: Daniel Chisholm	Read Replies (1) of 10293

Instead of selling covered puts, why not sell their (synthetic) equivalent, a naked call? Selling a naked call might be better because it requires only one set of commissions (instead of two). Also, you don't need to borrow stock and hence can't have your short bought in. Further, a naked call has the cachet of being the most risky sort of play out there, one in which you accept unlimited loss in exchange for a limited profit (the premium). If you are not comfortable selling a naked call on a stock, you should be equally uncomfortable selling a covered put, because your risk and reward are much the same. - Daniel

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