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Technology Stocks : Dell Technologies Inc.
DELL 133.92-4.9%Nov 13 3:59 PM EST
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To: Dan3 who wrote (169502)5/6/2002 7:56:05 AM
From: Dave  Read Replies (3) of 176387
 
Dan,

One thing that no one has considered is:

What was the price of Dell stock when Dell, Inc. wrote those puts?

For example, assume for the sake of argument, that Dell, Inc. wrote $45 puts while Dell the stock was trading at $10.

Dell, Inc. collected at least $35. During the time frame, Dell, Inc. collected interest on that $35. As long as Dell the stock is trading at a higher price than when Dell, Inc. wrote those puts, it was a "profitable" trade.

Of course, this analysis assumes that the premiums weren't used for "other" things.
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