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Strategies & Market Trends : Options
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To: Jill who wrote (2591)2/9/2000 1:58:00 PM
From: PAL  Read Replies (2) of 8096
 
I didn't violate the rule, I sell puts when oversold.
Good. Now the stock is oversold, you expect to bounce back since it is a good stock. Now after being oversold, you want to buy at even cheaper price by selling put. Remember that more likely you won't be assigned until expiry. By then if the stock does not bounce back to at least the strike price, is that the stock you want to own? If it does, it runs away from you, so that you just keep the premium, but not the stock.

But you can always say: hey that premium is the discount to buy the stock in the open market. OK if it stays within that range. But if the stock is really a dynamic stock, you might end up to buy it at a higher price.

Paul
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