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Technology Stocks : Cymer (CYMI)
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To: Steve Wood who wrote (17466)5/13/1998 9:25:00 AM
From: Scott Violette  Read Replies (2) of 25960
 
Steve,

I have had a similar experience with writing calls that Zeev has had. It has been very profitable.

IMO, Some differences that I see between selling naked put and covered calls.

Usually naked puts are leveraged beyond a person's means. When covered calls are sold, the investor usually has their money tied up in the stock reducing the leverage available and also increasing the awareness of the risk. Although selling puts and covered calls function the same (limited upside, exposed downside), the covered call seller is involved with stock for awhile and more knowledgeable on the stock. There are several other soft reasons they are usually different.

Basically, the biggest long term benefit of selling options is you collect money for time and you let people gamble and you are the casino(house). You benefit by indulging a person's weakness to want to get rich quick. Not many casinos going out of business. You do not win all the time but, you win most of the time.
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