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To: Geoff Nunn who wrote (152796)	2/1/2000 10:51:00 AM
From: Sr K	Respond to of 176387

Geoff, I was referring to the "functional equivalent" phrase. Selling a naked put (which Paul said was functionally equivalent to selling a covered call) has a margin requirement. Selling a covered put has no margin requirement. But, yes, buying or selling the underlying stock has a margin requirement. There is usually a margin requirement for short positions, but I have had short positions where the brokerage accounting seems to get confused by the credit balances and mark-to-market so they incorrectly compute the requirement, and pay interest on the credit balances. Normally, there is no interest paid on the proceeds of a short sale, but when you have a regular margin account, you reduce the debit balance with short proceeds and therefore save interest. If it goes positive to a debit balance, you can receive interest (which usually is a few points lower than the margin rate). Volatility affects calls and puts but if you want to sell for the most premium or buy for the least, you need to do this against trend: sell puts in a decline or buy puts in a rally, and buy calls in a decline and sell calls in a rally. The way cboe promotional materials make people act is "flat" - ignoring the ebb and flow and just deciding what position they want to take. That is not as good as buying undervalued and selling overvalued IMO.