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Strategies & Market Trends : Low Risk Low Stress Options Strategies

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To: the options strategist who wrote (10)	12/23/2000 12:21:20 PM
From: seminole	Read Replies (2) of 29

JJ If I am not willing to sell calls at these prices should I sell puts? My investment style is buy and hold but I have done several smaller trades this year. I am an aggressive investor with most of my funds directed towards one small stock. The stock trades at $17 1/2 and has a price range of $10-54 this year (volatile, IMO). I would buy this stock at $20 based upon my research and four years of progress by the company. I could sell a July put with a strike price of $20 and receive $5 1/2. Why should I not sell ten Puts? If I am wrong and the stock/market continues down, I would end up buying the stock at $20 with a real cost of $15. If I am wrong about the direction of the stock, is it not still better to buy in July for $15000 net than to buy now for $17500? If I am right, my very large position in the stock will do well plus I would receive cash from the options. What am I missing? I have never done an option. richard

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