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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)
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To: TigerPaw who wrote (1995)10/18/2000 9:10:54 PM
From: Dan Duchardt  Read Replies (1) of 2241
 
TP,

I sold some Intel $45 naked put options for November. Is there any reason (considering Intel's lower price) that I shouldn't sell calls at the same strike price?

Not sure what you have in mind here, but selling NOV45 calls here offers little premium, which is the most you can gain on the position, and exposes you to potentially huge loss if the market bounces hard and takes Intel with it. Looks like a very high risk, low return position to take. If you are thinking the price is down, and is likely to go up, buying those calls here might be attractive. That would create a net "synthetic long" position whose value would rise dollar for dollar with the stock, and stay that way no matter how much it goes up and down. Over the course of the next month the call time premium would erode, but that is now only $1.

Dan
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