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.

Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: TRCM who wrote (2567)	2/9/2000 12:59:00 PM
From: Poet	Respond to of 8096

TRCM: Both Jill and I (as well as a number of thread regulars) have asked that the disagreement be kept civil. To me this means no namecalling, no piling-on, no insinuations of stupidity. I'm going to ask you and everyone else involved to respect our request. Thanks.

To: TRCM who wrote (2567)	2/9/2000 1:05:00 PM
From: SecularBull	Read Replies (2) \| Respond to of 8096

Let's use CREE (a real company) as an example. It's trading at $142. If you sell the March or February $130 puts, you can collect roughly $10 and $4 respectively. That means that if the stock is put to you, you don't lose any money until it drops under $120 and $126 respectively. The underlying premise is that you would like to be an owner of CREE for $120 in March or $126 in February. If it isn't put to you, then you pocket the premium, and move on. But that's not the goal in this strategy (it is a possible alternative benefit). You want it put to you, and you lower your cost by a few dollars here and there. The collected premium is rolled into your long position basis, and there is no immediate short term gain (I hate short term gains!) The June $130-$150s at about $18-30 look very attractive (more so than the example above), depending on where you'd like to enter. Hope this helps. LoF