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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 214.87-0.1%3:59 PM EST

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To: minnow68 who wrote (72993)3/2/2002 9:58:07 PM
From: TGPTNDRRead Replies (1) of 275872
 
Mike, Re: <while staying on the wrong side of Black Scholes>

Selling covered calls is less risky than holding stock. In a rising market it is also less profitable. In a falling market it is less lossey.

There is a problem with Black Scholes which is that the option risk profile does not fit the standard model. Population at the fringes is substantially higher than one would expect.

tgptndr
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