SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Dell Technologies Inc.
DELL 121.05+4.9%Feb 6 9:30 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Don Martini who wrote (85541)12/21/1998 11:55:00 AM
From: BGR  Read Replies (1) of 176388
 
Good morning Don Martini!

First, let me congratulate you on a real nice trade by selling the Dec 65 straddle on DELL. Also, thank you for the advice about naked put sales. In a market with strong volatility and upward trend like the one that we are in at present your strategy makes absolute sense. However, I still have a emotional problem with naked option trades (though I do understand that selling naked puts is no different that a limit buy order). I am working on getting over that. :-)

I have a question for you and would appreciate your response. I suspect that the reason you prefer 5/75's over 5/85's is higher time premium. Now, I am strongly bullish on DELL and expect it to be in the 90's+ by May (25-30% increase in equity price given 55% app. earnings growth/annum). Given that, I do not expect to cover either 75's or 85's if indeed I sell either naked. With this in mind, I have to sell 1.5 times the number of contracts for 75's than I have to for the 85's to raise the same amount of premium, which means I am assuming greater liability. Does this make sense or is there a serious flaw in my thinking? TIA!

-Apratim.

PS: Sorry about the delay in answering, a project at work is keeping me extremely busy and I hardly have time for SI.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News