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Technology Stocks : Ascend Communications (ASND)
ASND 206.52-1.2%Nov 25 3:59 PM EST
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To: hal jordan who wrote (29241)1/4/1998 3:41:00 PM
From: Glenn D. Rudolph  Read Replies (3) of 61433
 
Typically, he will buy the underlying stock and
write covered calls to collect the premies, then buy back if the stock falls and resell CCs
on the next upswing.

Hal,

This strategy is "silly". The covered call is a synthetic naked put. A naked put and the covered call have the same upside potential with the same downside risk. There is a difference. One need not tie up capital in buying the underlying security and only one transaction is necessary to create the position. Write the naked put!

Glenn
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