Bob: whoever wrote the puts, has to either buy them back from you
or accept the stock at that price, if you do not own the stock
you can buy it, and "put" it to him, the co in chapter 11
has nothing to do with that, except the stock gets cheap as
dirt..a lot of people use puts as a way of insuring an exit
price..it's safer than a stop loss order, which don't always
work..say I bought a stock and it ran up, but I didn't want
to sell it but wanted to insure I did not lose but so much
of my profit..I'd buy puts..that way if she fell I could get
out at the put price. I have done this..I don't always buy puts
to just speculate..but sometimes I do..it's leverage..I buy
calls the same way if a stock is going up, I only sold puts
once..it was on AMD..I had her at 12.50..and sold puts at $10
only got a $1 dollar for them..10 contracts was all I had to
spare at the time ( i had to have money to cover my write in my MM account ) now whoever bought them could'v put 1000 shares
to me at $10, and she went down to 10.25 he likely sold them to some
one else..nobody exercised the puts I sold so I did not get it
at $10..which when if I deduct the $1 i collected for selling them
I would have been really paying $9 ...in my case I would have been
happy to got another 1000 that cheap..I had 3000 already, had started
buying AMD on her fall from grace last year and was averaging down,
went in at about 14.5, bought more as she dropped, and more again
as she dropped I'd have to look it all up, but any way I wound up
with a bunch ( at least for me ) more than I had intended to buy
but I never lost the faith..and if I could have got anther 1000 at
$10..or really $9 as I got the $1 ; I wanted them to avg me down some more ..caught a lot of flack from intel bulls for chasing AMD,
but go back to august and see who made the most profit percentage
wise..I eat them up.;-)..so you sell puts if your willing to buy a stock below that price, it gives the stock some support at that
level, I recieved a $1000 less comis for selling the ins. you buy them for insurance..or speculation..also I have some in the money puts on AOL, well in the money, if I buy the stock now at 36 I can put it to
some one at 40..she dips tomorrow morning and starts up, I can buy her..say at 35-1/2 maybe..and if she climb to 36 sell her for
.50 cent profit..real quick ;got to get in between the market makers,
it's a short sell in reverse..the puts you bought can lose their
value if the stock don't go down, when I first open a position
I do it close to the value..then buy more out and down if she goes my way, but that's my style..what did you
have to give for the april 20, and when..?
I would think that's a
good home run position..and that even if she don't go there it's
a good chance you will 4x your investment..in short order..
if you paid .25 and they go to a 1.00 and she stops her slide
sell em..if she keeps sliding down hold to see how the court
thingys work out..AOL could go belly up..best short I can see,
if I'm wrong on her I better quit..I have lost a few..more than
I like to talk about..but they never had the promise this one
does, nor half the bad press..the crescendo is building..on this
one she is getting almost as much bad press as the OJ trial,
got coverage..and I'm doing all I can to help her along,
a quick death is better than a drawn out one..I'm just being
nice but they don't like it..<VBG>
JIM |
