Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Elmer who wrote (116283)	6/18/2000 7:34:00 PM
From: Eric K.	Read Replies (2) of 1572503

Elmer-- You mentioned your running into margin limits. I haven't mentioned mine and I don't remember Paul mentioning his. Tell you anything? A strategy of buying naked out-of-the-money calls would also not bump into any margin limits. It would not imply that the person undertaking it had so much money that he or she was more concerned with wealth preservation than creation. And I would define a strategy of writing naked puts due to a practically religious hatred of a company (I'll take the money for "free," but can't possibly use actual money I have earned to buy stock/call options directly), as fairly heedless of wealth preservation. A huge chunk of your net worth would get eradicated if AMD were to halt the stock and announce something bad (or give credence to any of the negative rumors you seem to enjoy spreading). You would be looking at probably a -1000% return on your "free" puts. What is so conservative about a fixed upside, massive potential downside investment? -Eric

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