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Technology Stocks : Dell Technologies Inc.

DELL 133.20

+5.7%

Nov 26 3:59 PM EST

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To: finfan who wrote (77023)	11/8/1998 10:12:00 AM
From: PMS Witch	Read Replies (1) of 176387

Naked puts: I'm short DLQ.MH (Jan99 40 Put) at the moment. I opened this position by selling at $7.5 when DELL was at $42. I plan to let this position expire in January. The last I looked, these options traded at $1.5 after DELL's climb to $65. A couple of thoughts: I was fully prepared (and able) to buy the shares at $32 if the market moved against me. I don't think it wise to become totally dependent on your stock to act a certain way to avoid doom -- mistakes can be made. Also, a short put position is more likely to be exercised early if the underlying stock falls. Your counterparty has no motivation to hold shares once the time value of her options has disappeared; she'll exercise and pocket the cash. A suggestion: Look at initiating a bull spread with Jan or Apr options. You'd be looking at putting up much less cash for a position with similar returns. Also, you'd survive to play again (and make it back) if you were wrong. If you're right, some money's in the bag and you get to play again. Hope this helps somewhat, PW.

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