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Technology Stocks : Dell Technologies Inc.
DELL 111.10-7.8%Jan 20 3:59 PM EST
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To: edamo who wrote (96413)2/9/1999 4:01:00 PM
From: Don Martini  Read Replies (1) of 176387
 
Writing naked puts to raise a trade price, simple technique

Last month I bot some AOL, avg 155.
Immediately sold some 2001 leaps, 140-160 spread, received $100
On this combo the calls are covered, puts naked.
Net cost of stock $55

As AOL goes up I expect to close the puts for small price & sell others with higher strikes and premiums. Eventually get into a zero cost basis for the shares.

Today sold un-optioned AOL shares for 150
And sold March 165 puts @ 26

Effective yield: $176
Or: net cost of $139 if it's put to me next month

Either way is better than a straight sale at today's price.
I have some insurance against further price erosion and if AOL really tanks I'll roll the puts out and down, bring in larger premium & reduce exposure.

"I'll pay you less later [if I pay you at all] providing you pay me more today." That's a put rollout & down in action!

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