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Technology Stocks : Dell Technologies Inc.

DELL 138.98

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3:59 PM EST

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To: Sr K who wrote (152790)	2/1/2000 10:04:00 AM
From: Geoff Nunn	Read Replies (1) of 176387

Sr K, Re: I think he meant the put premiums (and call premiums) expand and contract like ebb and flow and the key to options investing is not the position you want to take, but selling overvalued and buying undervalued options, which means selling only when the premiums have expanded (puts in a stock decline, calls during a rally), and buying only when the premiums have contracted. Hmmm..not sure what this means. Are you suggesting -- or implying -- that in a stock market decline put premiums are more likely to rise than call premiums, or that in a market rally the opposite is more likely to occur? It sounds to me like that is what you are implying, but perhaps not. I would submit that premiums on puts and calls both increase during periods of rising volatility, and both decline when volatility subsides. And further, that this direct relationship between option premiums and volatility holds regardless of whether the market is rising or falling. Also, on the strategy of shorting a stock and simultaneously selling a put against it, why do you say this doesn't require margin? Since when did brokers begin not enforcing margin requirements on short sales of stock?

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