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Technology Stocks : Dell Technologies Inc.

DELL 137.65

+4.2%

9:39 AM EST

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To: taxman who wrote (143715)	10/4/1999 9:23:00 AM
From: rudedog	Read Replies (1) of 176387

taxman - speaking as a relative novice, I have a pretty simple idea of the risks of option plays. But it seems to me that the buyer of either puts or calls has a more limited risk, since the buyer always has the choice of not exercising the option - his risk is limited to the premium on the option. As to who is more likely to benefit, it seems to me that depends entirely on which investor more accurately predicts what will happen to the underlying stock. In my limited option plays I have yet to lose. I hope that is because I developed a good understanding of where the stock might go near term and chose an option where the strike and expiration looked likely to expire worthless. Maybe I have just been lucky... But it seems to me that for stocks trading in a range (as both DELL and CPQ have been), selling calls is a better play. If the stock regains a steady upward momentum, as I think it may in early 2000, I would still sell puts rather than buy calls - I get the premium and if the stock is put to me, the worst that will happen is that I will own a good stock at a bargain price.

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