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Technology Stocks : All About Sun Microsystems
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To: hobo who wrote (39485)12/19/2000 3:03:07 PM
From: Prognosticator  Read Replies (1) of 64865
 
JC:

Selling puts is pretty advanced options trading, sort of jumping in at the deep end. But the downside risk is no worse than buying the stock at market, and you do get to keep the premium if the price keeps going up, as a consolation for not getting the stock.

It may well be probably safer than leveraging yourself through margin, which can lead to margin calls. I think this is one force that has been driving SUNW down, forced selling as the stock price dropped for those in too deep with margin. BWDIK.

I'm buying Jan calls, with strike prices at $30 and $35, in hopes that the new year brings a rally. The only consolation I have is that my downside risk is limited to the cost of the calls, and I never commit more than 5% of my portfolio value.

P.

(If you think this is investment advice, let me show you my recent performance :)
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