Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 210.50

+0.5%

Nov 21 9:30 AM EST

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To: Greg h2o who wrote (37057)	3/3/1998 5:08:00 PM
From: Glenn D. Rudolph	Read Replies (1) of 61433

Both transactions would cost the same (assuming you're already long the underlying stock--in this case the person appears to be). So, the brokerage house doesn't discourage writing naked puts because of that. The reason you'd make more on the naked puts is the risk is so much higher. As many things as brokers and brokerages do wrong, this isn't one of them. regards, Greg, The risk is identical. I have already explained that. Secondly, who holds the equity on a covered call? The brokergae house wants you to write covered calls. It benefits them They do not want you to write naked puts. The risk is not greater and the necessary equity is far less. Glenn

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