Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (67618)	9/13/1999 12:43:00 PM
From: Don Lloyd	Read Replies (2) \| Respond to of 132070

MB - (...Another point: why mess with the stock and have a useless third leg? Buying stock and selling a call is basically shorting a put and holding cash. So, the author could accomplish the same think much cheaper, with less commissions, less friction and slightly less risk by selling one cash secured put and one naked put. Why did I use the stock in the straddle I mentioned? I had had it put into my portfolio from a previous credit bull spread. Otherwise, I would never do such an inefficient trade.) Not that you're wrong, but these days stock often has both lower commissions and spreads than options. In addition, stock will have to be re-purchased only half the time on average (for month to month writes), when it is called away. Also, calls usually have a larger time value to decay than puts. Regards, Don

To: Knighty Tin who wrote (67618)	9/14/1999 2:31:00 PM
From: wlheatmoon	Respond to of 132070

So, my recommendation is that Leap Straddles (short puts) can be profitable. The best time to execute them is when the market is low, the industry you like is low and the stock you like is undervalued (Pfizer was at 13 times eps when I played my straddle). Don't do them on thin margin of $400, as the writer suggests, or you are very likely to be snuffed out by margin calls even when you are right. And be sure of the stock you are willing to play at extremely high risk. michael, i just found the above note...you had posted it to yourself..-g- thanks for that pronouncement....that set of criteria were my thoughts exactly,,,,and i'm glad to have you point that out so clearly. now,,,,i've got to go find me some stocks in that category...-g- mike