Sepracor-Looks very promising Message Board

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Biotech / Medical : Sepracor-Looks very promising

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To: Ed Ajootian who wrote (1335)	10/28/1998 10:31:00 PM
From: M. Ramle	Read Replies (1) of 10280

Ed: You just answered your question, i.e. the only reason I normally buy the puts on the lower strike price (5-10 pt. spread) is as a hedge to reduce the margin requirement, especially if am taking a large-size position (50 contracts or higher). Once I am put the stock for selling the November 60 puts, I would normally sell the November 55 puts to unravel the hedge position (and maybe collect some premium). Keep in mind that selling a naked put option is very risky, and you are always better off minimizing your risk and margin requirement by hedging it with a similar strategy like the one I follow. I had been burned pretty badly in the past for selling naked put options (UAL in '89), and I will never do it again. GOOD LUCK. Mazen

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