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

To: niceguy767 who wrote (83483)	12/17/1999 6:32:00 PM
From: Niels	Read Replies (1) \| Respond to of 1572888

Without wanting to butt into any arguments here, writing naked calls is extremely risky as there is no upside limit to the stock price and hence being short a call has no downside limit. The risk in writing puts is limited since the price of the stock can't go below 0. Also put premiums tend to be slightly higher than call premiums making put writing a better strategy when one assumes a stock has limited downside potential. An added complication, though is that puts may be exercised before expiration (it is sometimes optimal to early exercise a put, while it is never optimal to exercise calls before expiration) Best Niels