Chesapeake Energy CHK Message Board

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Gold/Mining/Energy : Chesapeake Energy CHK

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To: Greed Is Good who wrote (337)	2/14/1998 10:18:00 AM
From: DS	Read Replies (1) of 726

Actually selling puts (assuming no other offsetting positions)reflects a flat to bullish outlook. The seller of the option is agreeing to buy the stock (gets "put" to them) at 7 1/2, so they would be long the stock if the price is below 7 1/2 on expiration, regardless of how low it is trading. MSFT and INTC are big users of this strategy to purchase shares for their employee options. If price falls they know their cost (strike price), if the price is above strike on expiration then they keep the premium and re-write more puts. DS

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