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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: William L. Oppenheim who wrote (10965)2/8/1998 11:07:00 AM
From: SJS  Read Replies (2) of 95453
 
Bill,

Stock options (specifically buy/write strategies) mitigate downside risk. If the stock goes lower than the option premium you collect, your protection is "gone" and you still lose your own money as it slides.

Insurance covers loss. Once the deductible is paid on the loss, a good policy coupled with some personal tenacity, can cover what's left.

There's a difference here. Saying options are "insurance" is really too simplistic.

I think options offer protection, typical insurance offer a financial "cure" (or remuneration).

Regards,
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