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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: greg nus who wrote (79041)	11/8/1999 8:15:00 PM
From: Elmer	Respond to of 1574683

Re: "Elmer, I am slightly puzzeled by your investment stratedgy. Please understand I am not knocking how you invest. hereis whats puzzeling. If you sell AMD puts you risk one day owing AMD stock. Should AMD stock blowup as it has from time to time. The put buyers would put the shares to you at the most inoppurtune time. Also if your selling CC covered calls it indicates your an amd stockholder. Both of these conditions seem somewhat inconsistant with your negative posts on AMd and your love of Intel. Help me out here? " I welcome an honest question. Let us keep in mind that our goal should be to make money first and root for our favorite team second, agreed? In addition, diversification is always a good idea. I see an opportunity to make money with AMD by playing the range this stock of late seems to be locked into, ~$15-$22. I have been writing PUTs on AMD every month for about a year now and I have been assigned twice. The most recent being this month at $20 for which I immediatly sold Nov 20 CCs. I also wrote more Nov 15 PUTs. I typically make .75 - 1.00 per share per month for the PUTs. For the shares I paid $20 for, the margin interest costs me about $.13 per share per month. If I make $.75 per share per month on CCs I am making a killing using other peoples money, all with no money out of my own pocket. The margin is secured by my much greater Intel holdings which I hold as a core stock. So the Intel is growing while I margin it to make free money off AMD. If AMD tanks it can only be good for Intel. If AMD holds steady or only drops a little, my PUTs expire worthless and I make money. If AMD goes up my PUTs still expire worthless and my CCs will get called away, which is OK with me. So to summarize, I only look to make a small % each month on AMD and never go more than a month out to protect myself from volitility. This is a business first and a religious war second. EP