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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: Ray Rueb who wrote (38859)	3/24/2000 12:42:00 PM
From: McNabb Brothers	Read Replies (3) \| Respond to of 93625

Thanks Ray, but been doing it for 9 years and have never had a down year. I never sell a call on a stock I'm not willing to go short and I won't sell a put unless I'm willing to buy the stock! Let me ask you the difference in selling naked calls short and selling a stock short? I sold the April $500 short the other day for $22 or so when RMBS was trading right about here and I have a $140 buffer! If I sold the stock short and it went to $500 I would be down $160, sure my call would go up, but more than likely some time would have passed and the time value would decrease more than what the stock had gone up! If RMBS hits $500 and they call it from me I will go short the stock with a short basis of $522. This morning I sold the $300 April strike for $60 and change so I have a premium of about $24 right now. So IMO the stock would have to go to $360 for me to start loosing money, because remember I will be willing to go short if it's above $300 between now and April expiration! Options are meant to be sold IMO where as most people think they are meant to be bought. Why pay a premium for an asset especially a wasting asset? IMO if one can not afford to buy the stock or short a stock and they purchase options instead they do not need to be in the market, unless it may be for insurance purposes which in the case with options is a very expenses way to insure ones self. I better stop now before all the options buyers stop buying for if or when they ever wake up and see what options really are, they may stop selling them to me especially for the big premiums one can get in this market! Ray where most people get in trouble selling naked options is selling more than they can handle! You mentioned selling puts on P&G, I can tell you right now the person that sold the naked puts on PG the day before the crash is better off today than the person that bought the stock the day before it crashed, for the put selling will have a lower cost basis than the person that bought the stock. Grant it if that person does not have the money to purchase PG then he or she should have never been selling the puts in the first place! Hank