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Technology Stocks : Compaq

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To: Eddie Kim who wrote (31067)8/18/1998 1:30:00 PM
From: Jimbo Cobb  Read Replies (1) of 97611
 
There is a limited upside in selling naked puts, but sure I'm still making more money, as the value of the puts change everyday along with the stock price...once the stock price is above the strike price, you might not make as much money with the naked puts as you would holding call options or the stock, but you are still making money.

Of course, the best case is that the puts will expire worthless and I will get to keep all the money they gave me up front, but until then, I actually owe some amount of money for the current worth of the naked puts...I won't receive any additional money, but my debt for the current worth of the puts will continue to drop....

Mark.
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