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Technology Stocks : Dell Technologies Inc.

DELL 133.78

-0.1%

Nov 14 9:30 AM EST

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To: Ron Graham who wrote (34852)	3/18/1998 10:56:00 PM
From: Mark Sanders	Read Replies (1) of 176387

Ron, PUT option buyers pay a premium to protected themselves from a severe downturn in the corresponding stock. PUT sellers have an obligation to buy the corresponding stock at the strike price. For example: DELL stock at 63 1/4 DELL April 60 PUT is 2 1/4 If you sell the April 60 PUT (which expires in 1 month), you get a $2.25 premium. However, you incur the obligation of buying DELL stock at 60 if it goes below this price before the PUT expires. The premium for PUTs goes down drastically, as expiration approaches. Therefore, if the PUT premium goes down very low, you can buy it back, get rid of your obligation, and pocket the difference. It's a great game to play if you don't mind buying the stock at the strike price. I will be ready to play again next week. Mark

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