Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: rudedog who wrote (152780)	1/31/2000 10:32:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Rudy, I think selling naked puts is moderately bullish even near term - the bet pays off if the stock goes up a little or at least does not go down. Selling covered calls is less bullish - the assumption is that the stock will not go up to the strike but will not go down much either - then you keep the premium and the value of the underlying is unchanged. No!!!! They are exactly equivalent strategies. Try it using an options calculator and you'll see why. When you sell a naked put your maximum profit is the premium received and is achieved at or above the striking price. In a covered call, the maximum profit you can receive is the striking price plus the premium received less the cost of the stock. Depending on the nature of the position it can be neutral to bearish if you sell out of the money puts or in the money calls against your stock. Selling ITM puts or out of the money covered calls is always bullish, although upside is limited. TTFN, CTC