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

To: Don Lloyd who wrote (67626)	9/13/1999 5:19:00 PM
From: Knighty Tin	Respond to of 132070

Don, True enough that stocks have lower commissions than options for most people, including me. However, in one case, you are playing long stock, short call, short put, while in the other, you are just shorting two puts. So, you have already paid commish on two options in either set up. Whatever you pay for the stock, assuming it is not zero, is extra commission for the less efficient position. Another point is that the cash you are not wasting on long stock earns interest. And, also important, every security has friction costs. So, if you play 3 different security classes for a position that only requires two, you are getting wacked by three spreads instead of two.