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

To: tyc:> who wrote (884)	1/22/2000 9:11:00 PM
From: taxman	Respond to of 1235

no problem. in fact what you wrote is damn good advice, probably more eloquently expressed than the post i just sent out. i couldn't agree with you more. you can't cancel a memo once you send it, but you have 15 minutes to edit it. during that time you can go into the memo and change it or delete it so the box is blank. i've done that where i posted a message and just as soon as i send it i have a change of heart. regards

To: tyc:> who wrote (884)	1/22/2000 9:38:00 PM
From: tyc:>	Read Replies (1) \| Respond to of 1235

There is another strategy for getting out of a threatened short put position, or out of a deep-in-the money covered call when you feel the market has turned or topped out.... What you do is buy calls and short the stock.. You buy as many calls as you need to make a delta neutral position with the short stock. You will have bought more calls than stock sold short. The result is you will make money whichever way the market goes. On the upside, your calls will more than offset the loss on the shorts. I have just on Friday rolled out of a covered call situation this way because in my opinion the stock was topping out; I sold the stock of my covered call and bought out-of the money calls to protect my now naked deep in the money calls.

To: tyc:> who wrote (884)	1/23/2000 12:47:00 AM
From: OX	Respond to of 1235

a couple of points... (1) that's why I only go out 1 month and don't overleverage on the puts (no more than I'm willing or can afford to own) (2) the long term trend is bullish and until I see otherwise I am not going to constantly look over my shoulder about a possible 1929 or 1987 style 'crash'. while there is an elegance to taxman's strategies, I think everyone will agree that everyone has their own style, comfort level, etc. as TomK and others have pointed out. >>>you and I know better ! naked put writers don't seem to realise that the only reason their strategy has paid off is because we have been in a rising market. They are in for a shock when this market turns.<<< this has been a good discussion, talking about the pluses and minuses. but please don't start w/ the 'your method is inferior talk'... that gets us nowhere. the ppl who continue to sell puts in a bear market will be the same ones who fail in many other types of strategies... please don't assume that all NP players are ignorant of reading the markets.