Selling Puts: Have Cash Will Travel Message Board

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Strategies & Market Trends : Selling Puts: Have Cash Will Travel

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To: taxman who wrote (1023)	1/25/2000 12:30:00 PM
From: tyc:>	Read Replies (1) of 1235

No that wouldn't do at all ! You know what I think of naked puts !! To begin with, why would I restrict my time premium receipt to what is offered by the put ? Why not grab what they offer on the common too ? I can always buy common to hedge the upside risk. The whole thing is this ! What kind of exposure (bias) do you want RIGHT NOW. When I took off my hedge yesterday, The bias of my straddle was +136... It was as if I was long 136 shares. However I have no fewer that 11 short options. And these options will erode in price by $120 during the next week given NO price change in the common. If my bias is correct; the value of the position goes up even more. Needless to say, since removing the hedge yesterday the stock has dropped over a dollar. But that is not the fault of the straddle.

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