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Technology Stocks : Ascend (ASND) Traders
ASND 198.54+0.6%2:00 PM EST
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To: Carl R. who wrote (215)9/20/1997 3:55:00 PM
From: Ross   of 369
 
Carl,

You said;

"Selling March 60 puts is pretty much like buying the stock, except that I get cash instead of paying it out"

With my limited knowledge of options (and suspecting that others here
may have a similar background).. Selling a Naked put is "not" the same
as owning the stock.. If you own the stock you can lose your inital investemnt
and that is all.. But, with a naked put, you recieve the cash (in this case approx
24.00 for ASND march 60's). If the stock moves lower, almost dollar for
dollar you will owe back (in march) the original cash you recieved "plus" the
amount of the stocks decline.. If ASND went to $20.00 you would "owe" approx
$40.00.. I believe I understand what you originally meant, if the stock moves up; but you should clarify the risks. Naked puts are fun, but risky!!

Thanks,
Ross
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