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

To: Bill Jackson who wrote (83429)12/17/1999 1:49:00 PM
From: Goutam  Read Replies (1) | Respond to of 1572939
 
Bill,

Emer, So the WRITER is the seller. And on the third Friday on January they stuff them down your throat at $25 and you sell them at $40. and of course they lose $15 each

No Bill, you got that wrong! The person that bought puts from Elmer is not obligated to sell to him at $25. The seller can let the options expire. If the stock price ends up above $25 - the seller will not exercise the contract and the contract would expire - allowing Elmer to keep the premium he charged in assigning that right to the seller. Seller would excercise those contracts only if it's beneficial to him/her - in the case when the stcok drops below $25 - say to $15.

Goutama



To: Bill Jackson who wrote (83429)12/17/1999 1:59:00 PM
From: Elmer  Read Replies (1) | Respond to of 1572939
 
Re: "Elmer, So the WRITER is the seller. And on the third Friday on January they stuff them down your throat at $25 and you sell them at $40. and of course they lose $15 each. Good work if you can get it. "

Bill, I suggest some remedial reading on options.

EP


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