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Strategies & Market Trends : Options
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To: Witold who wrote (8084)10/28/2000 5:41:28 PM
From: Jill  Read Replies (1) of 8096
 
Hi...this thread is really not active anymore and you might want to try a few other threads, but briefly, when selling puts make sure you have enough in cash (rather than margin capacity) to buy the # of shares that would be put to you. Otherwise, with changing market conditions, you could end up in a margin call, because each short put requires a certain amount of margin to be held against it and if the value of the short puts increased dramatically, eating up all your margin capacity, you could be in trouble. This happened to me last spring during the naz crash requiring me to either buy back some puts at inflated value when I did not want to, and/or sell some stock (NTAP) I didn't want to to increase margin capacity.

Also, do it on a stock you'd be happy put at that price no matter what.

Jill
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