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To: carl a. mehr who wrote (90353)	10/15/1999 1:45:00 AM
From: Elmer	Respond to of 186894

Re: "That's simple enough, but what's a naked put? " A covered put is one that is "covered" by a short sale of a stock. Therefore a naked put is one that is not covered. EP

To: carl a. mehr who wrote (90353)	10/15/1999 2:28:00 AM
From: The Duke of URL©	Respond to of 186894

A put is a right to sell the stock at a fixed price. To put it to someone. :) Buying a naked put is the right when you don't own the shares. Selling a put gives another the right to sell you the shares. (and you, conversely, the duty to buy. It is uncovered or naked if you don't short the same stock at the same time. It doesn't matter what the strike price (the price of the stock) is but if you sell a put for a strike price above the market price. the premium (your profit or the cost of the put to the other guy) better be more than the difference or the put wont be outstanding for very long. :) So 'to put clothes on the put that you are selling" you simultaneously short the same stock. If the price goes down, you have to buy the stock. You can then use that very stock to 'cover' your short sale. But kids, were professionals here, don't try this at home. :) Duke

To: carl a. mehr who wrote (90353)	10/15/1999 7:39:00 AM
From: nihil	Respond to of 186894

There are two ways to cover a put sale. 1. short the stock; 2. buy a put some points below the price of the put you sold. 2. is called "a bullish put spread" and reduces the margin you must hold for the naked put, and also reduces your potential gain. A good strategy for a stock that you're willing to buy but don't expect a big short-term gain is to sell a put at the price you're currently willing to pay and forget about it. Selling in the money puts on stocks that you are bullish on has great potential gains compared simply to buying the stock. Trading puts on your favorite stock (INTC) is a lot of fun and can be profitable. Check with your friend Paul who I suspect has worked out some slick strategies. Some I like follow: Any time INTC goes down sell at the money puts. Any time it goes up sell some INTC. And sell some out of the money puts (if the stock stays down you'll buy back the INTC you sold at the top. When you think you're on a run, sell some out of the money puts. Pay attention to LEAPs put. Selling big out of the money INTC puts (and selling at a profit) long before maturity has made money over the past few years and it lets you sleep pretty well (I prefer bullish put spreads). And one can sleep most of the time. I also use a lot of bullish call spreads. It is important to make sure you get most of the bid-ask spread to make a spread profitable. Sell an eighth below the ask, and buy at the bid or + 1/8 in setting up spreads. Find a broker who will put your bids on the floor (agency). Talk over commissions and conditions of sale with a live broker and make sure you have a knoweldgeable one. It is important to protect yourself when closing out a spread.

To: carl a. mehr who wrote (90353)	10/15/1999 9:20:00 AM
From: John O'Neill	Read Replies (1) \| Respond to of 186894

Carl...a naked put is an uncovered option.... To puts clothes on it one needs to sell covered calls or puts which means they need to own a like amount of the underlying stock.....long for calls and short for puts.....this is a form of guarantee that one can cover one's losses...if you short the stock and sell puts, you get the premium on the put, but can't lose more than that because you have the stock short to balance any big loss in the put if the stock crashes.... a brokerage co screens people for big bucks before allowing them to write uncovered calls or puts.....the potential losses and profits can be staggering with writing options on stocks you don't own....