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Strategies & Market Trends : Options

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To: SecularBull who wrote (6111)4/6/2000 1:39:00 PM
From: edamo  Read Replies (1) of 8096
 
lof..."never means never"....i said it and if you read my response on the subject matter of selling "covered" (not in the text book definition, but as in "cash secured")short puts, you will see that you always have intrinsic value, whereas a long call portfolio can go to zero...

you have until expiration to repair....but being fleet of foot puts a more durable patch on the leak....sometimes better then the original position.

lower return on short put, but also lower risk if cash secured....higher return on long call, but higher risk, even if limited to premium paid...loss is a loss is a loss, no intrinsic value on a failed long call position...

management of capital efficiently is what most don't understand...
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