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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Hectorite who wrote (11350)8/8/1999 5:39:00 PM
From: NateC  Respond to of 14162
 
good point Hectorite.....the main reason I still very slightly prefer CC's to naked puts.....is that I'm evolving from an equities only stock investor.....to an options investor....and I know what happens to naked put investors when their stock suddenly tanks 10 - 15%....andthey can't get through by phone or net....it can not only ruin your day...it can ruin a whole year of otherwise good trading.

this is why it makes reasonably good sense to buy a protective put 5 points or so below your short naked put (creating a bull put spread).....particularly if you have the skill, luck, and timing to buy the PP on strength....thereby paying less for it. This also takes away most of your margin requirement for being short the naked put



To: Hectorite who wrote (11350)8/8/1999 5:40:00 PM
From: NateC  Respond to of 14162
 
some brokerages require only 20% of the required assignment amount....for the investor who is short a naked put....In other words if you sell 10 contracts of the October 10 put on XYZ......whose price is at $10......your requirement is only 20%. Unfortunately none of mine will do that ( Ameritrade, Dreyfus)....they are at 50%


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