Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 212.29

-2.2%

Nov 19 3:59 PM EST

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To: Glenn D. Rudolph who wrote (37513)	3/4/1998 5:22:00 PM
From: Marc Hyman	Read Replies (1) of 61433

Re writing calls vs puts The positions are identical except the investor also has their money tied up in the underlying security with a covered call. Uhhh, I know I shouldn't get into this but there is another difference -- the direction of the change in price. Assume I write one $30 put and one $30 call while the stock is $30. If the price goes up the put expires and I get to keep the premium, but the call is exercised and have to come up with the shares. If the price goes down the call expires and I get to keep the premium, but the put is exercised and I have to come up with the cash. Now last year as the price kept going down I made quite a bit writing calls. Had I wrote puts I'd be out a lot of cash, but would have more shares. It depends what your goals are. At the time mine were to keep my shares (part of a long term investment measured in years, not months) and yet still make some money with some short term trades. With the price going down and my goals it made sense to write calls. // marc

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