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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: SJS who wrote (2395)	11/30/1999 9:49:00 PM
From: PAL	Read Replies (1) \| Respond to of 24042

Hi SLS: Excellent post. 20/20 of course I would be better of selling dec260 puts today than yesterday, or maybe tomorrow than today. I did not time the market. I only know that based on the company, I am willing to pay around 240. How about hedging? That could come into the equation, however, that cost money and increases the cost basis. Then how do a person protect from further south of the stock? 1. you start with a dynamic company which you believe strongly in, and that you are willing to be assigned. 2. if you are assigned, then you can do a cc and sell put. I prefer LEAPS, unfortunately not yet available. 3. repair strategy: buy back the put at a loss, declare on income tax. roll it to jan260 put to get premium to buy back the dec260. do it again if necessary. now jdsu hopefully will be higher than 260 come january or some time next year. If Not: then we are in the wrong stock: in that case sell put on another dynamic stock, use the funds to close the put position on jdsu. I strongly believe in JDSU, so if I am going to be assigned, 240/sh is OK with me, just like Gregory Mullineaux was willing to pay for 239. Worse comes to worse, I roll the put. This is a different strategy of hedging outright. You are quite right: selling naked put is not for everybody, the risk is big and if one does not know how to repair, it can cost a lot, especially when one is overextended and gets margin call. been there done that. Paul

To: SJS who wrote (2395)	12/1/1999 9:42:00 AM
From: Jill	Respond to of 24042

Hi SJS, I think I do understand...my plays thus far on Qualcomm have been to sell puts below the current trading range, though of course that moves around a lot! I think the 310s yesterday would've been safe for a few weeks from now, but if worst came to worst, and Q really tanked, you could buy them back for more, and then sell ones further out, picking a strike price that made up for your "loss". Because, as you know, all premiums will be richer/costlier at that point. So as long as you feel you are in the right stock, it seems there is room to move for the occasional error. (Or just let it be put--it would be getting the stock relatively cheap considering what will probably happen post split. Calls are another matter. I made a lot for a few weeks, whiel Q was on its tear & I was rolling out calls, but have lost a portion of it in time decay on Jan 400s as Diamond pointed out. I'd still come out far ahead if I just sold those right now. Maybe I will. Thanx for the ongoing discussion Jill