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Technology Stocks : Dell Technologies Inc.

DELL 122.55

+4.4%

Nov 21 9:30 AM EST

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To: freeus who wrote (113120)	3/29/1999 11:25:00 AM
From: edamo	Read Replies (1) of 176387

freeus...re put selling... no, not kind of like shorting...more like going long..stock up/put down...writing covered calls akin to shorting...stock up/call up...put selling bullish call writing neutral/bearish...you sold dell 0150 put..(zdemj) @ about 19..if put to you your cost of dell is 31 (50-19)...below the price of the common by 26% 39/31....conversly to buy a 0150 call zdeaj would cost 11....a premium of 56% to the common..my sometimes logic or lack of same is that buyers willing to pay more premium in a belief that the stock will be higher than 50 than lower than 50 in 01...the old "over under game"...in this instance biased to the "over"...you've written an insurance policy to someone, who not only believes dell will be below 50 in 01...but below 31...so if you are the put buyer and hold the stock, why not sell at 39, instead of insure to 31...doesn't make sense to me...the options trader is a story for another day...anything above 31 and you profit, it has cost you nothing except tying up capacity...perhaps wise, perhaps unwise depending on the perceived opportunity loss...but in my world i can spend 1900 today...may never get the chance to spend opportunity..don't panic if the position short term moves against you..allow the time erosion to work to your advantage...e.g if dell goes flat till 01...premium would be 11...(50-39)..the 8 difference eroded with time..good luck, ed a.

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