Options for Newbies -(Help Me Obi-Wan-Kenobe) Message Board

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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)

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To: Zach E. who wrote (744)	2/26/1998 9:45:00 PM
From: Madpinto	Read Replies (3) of 2241

I feel as if my posts are being somewhat misunderstood on this subject. Let me restate my point. With option purchases, your profit potential is virtually unlimited, and you cannot lose more than your investment while you own the option . If you write covered calls, you can lose the total price of the stock less the option premium. Your upside is limited to the strike price plus the premium. The risks of writing covered call is equivalent to selling naked puts. I am not claiming one strategy is better than the other. However, the risk of selling naked puts seems to me to be greater than the risk of buying puts or calls. I am curious. How do feel about selling naked puts?

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