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Technology Stocks : Dell Technologies Inc.
DELL 115.33-5.5%Feb 5 3:59 PM EST
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To: freeus who wrote (88290)1/9/1999 8:17:00 PM
From: PAL  Read Replies (1) of 176388
 
Freeus, you might check the margin agreement and see the requirements for selling naked puts. I suggest that for now you just do a "paper trading" and see the results. When you do covered calls, there is always a danger that your stock will be called away, and especially Dell, you want to keep it forever. But as I posted, there is a remedy for a wrong move so that you can roll it to a higher strike price.

You might want to write it down as if you are really doing this (just pretend): Sell 5 Dell Feb75 puts at 4 1/4. The symbol is DLQNO. This means that between now and Feb 19 (3rd Friday) the put holder has the right to sell to you 500 shares of Dell at 75. If that happens, then your cost is 75 minus 4 1/4 = 70 3/4 (commission not included in this exercise).

Dell is going to report earnings before Feb expiry date. We anticipate that the stock price will be higher than current level. If Dell stays above 75 at least until Feb75, you keep the premium which is $ 2,000+.

One thing to remember is that if you write naked put like the above, you should do it only to a dynamic company like Dell or Csco, where you expect that the stock will keep going up.

There is nothing complicated about options, just use common sense. The motto is still K.I.S.S.

Good Luck.

Paul.

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