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.

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

To: Kevin Podsiadlik who wrote (30369)	10/2/1999 8:18:00 PM
From: ed	Respond to of 74651

To sell the put just to make sure that it will lock the buying price of the stock in the future at a certain cost level. By selling the puts, if the stock price actually goes up, the price to buy the stock will go up, but the total cost will be reduced with the premium made by selling the puts. If the stock price goes down, the price of buying the stock will go down, but the total cost will go up if you add up the premium lost by selling puts. All in all, by selling the puts, the total cost of buying the stock will be locked at a certain level . However , if you buying puts, you bet in one direction only , you either end up with buying the stock with much higher cost when the stock price going up ( you lost your premium of the put + higher stock price ) or you buy the stock with much lower cost when the stock really going down .