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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (30356)	10/2/1999 4:11:00 PM
From: rudedog	Read Replies (1) \| Respond to of 74651

Kevin - The puts themselves are just an instrument. Someone has to be on each side of the bet, and their motivations and expectations are pretty much opposite. No matter how you take the statement, neither the puts themselves nor the selling of them place a bet on the stock price falling. There are two sides to a put transaction - it is bearish only for the buyer, who profits if the stock drops below the strike and loses his money otherwise. It is bullish for the seller, who either acquires the stock or keeps his premium if the price stays above the strike. To be correct, the author would have had to have included the buying of puts somewhere in the equation. One correct construction (but one I doubt the author would have made) would be: Microsoft's option program involves selling puts to people who are willing to bet against Microsoft that the stock will fall.