Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (12160)	12/27/2001 2:49:24 AM
From: Moominoid	Read Replies (1) of 74559

Jay Why do you reckon that risk is as low as a CD on writing NEM options? So far I am doing very well on writing News Corp options, though I have been doing it rather less time and seem to be improving. But I still think it is risky. The downside risk on puts is about the same as buying stock on margin (I can use 35% margin to buy News stock and need to put up about 27% with my broker and the exchange to write options. I think the fact that it makes money even when nothing happens probably compensates well enough or better for maybe missing some upside action. About the same scenario applies with the covered calls on margined stock. This much is obvious, so I guess you just think NEM won't go down. But it has been somewhat volatile over the year (though less than News Corp of course). David

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