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Strategies & Market Trends : Selling Puts: Have Cash Will Travel -- Ignore unavailable to you. Want to Upgrade?

To: David Lind who wrote (813)	1/7/2000 2:31:00 PM
From: Tom K.	Read Replies (1) \| Respond to of 1235

...(2) Compare the premiums to similar stock candidates to insure that you are getting an adequate reward and credit,.... David, as a suggestion for your point #2, you may want to evaluate the trade on its own merits. Using LU as an example, since it is a good issue, my assessment is that anything below 50 is a good buy. Therefore I sold Feb 45's at 1.0625. The return is 1.0625/20% of stock price ($53) = 1.0625/10.3 = 10.3% for 7 weeks or about 75% annualized return. Not too bad a return. If I have to buy it, it will cost me $44 which is OK as well. Just a suggestion regarding assessing a trade, Tom