Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 210.50

+0.6%

3:59 PM EST

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To: Mighty Mizzou who wrote (56347)	10/21/1998 6:17:00 PM
From: James A. Shankland	Read Replies (1) of 61433

Now, do you know of any analogous strategy (protective PUTs) for CALLs. Well, you can write covered calls against your stock, I suppose. The disadvantage, compared with buying protective puts, is that your downside protection is limited -- if the stock really tanks, your call premium won't compensate you for the loss -- and if the stock goes way up, you will lose when you close out your short call. Definitely not the thing to do if you believe ASND will be bought any day now for $70. The advantage is that you get paid for doing this (the call premium), instead of paying to do it (buying a put).

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