Options 201: Beyond Obi-Wan-Kenobe Message Board

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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe

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To: Dan Duchardt who wrote (14)	8/13/2001 12:27:12 PM
From: edamo	Read Replies (3) of 1064

dan....put sales..."if the stock starts falling...you might even get out with a profit..." if you have a penchant to sell puts, it oft times is best to be intimate with the underlying stock, and take advantage of any anomalies in the implied volatility caused by a specific or market news event that sends the share price rapidly down.... real life example....4/12 atml traded at 10.75, falling from around 16, you could sell the jan03 10 strike puts for 3.30....a better then money market return for a cash backed sale....today the common is at 9.75, but the put is 2.70 x 3.10.....so buying the stock would have incurred a 10% loss, selling the put gives a 10% profit... all this to say...look for "special situations".... and once the premium drops below about a half, and if ample time still remains, close it and maximize the per annum return... good luck ed a.

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