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

To: Tom K. who wrote (1177)	4/11/2000 12:53:00 PM
From: Greg Higgins	Read Replies (2) \| Respond to of 1235

Tom K writes:, especially if your PUT is 100 points in the money per your example. You're totally ignoring the fact that it's also 20 months out! People like to talk about having time to work out of a bad trade. My point is a trade can turn very bad overnight. How many stocks have been hit will 30, 40 and 50% declines in a day? Tons. If you sell puts thinking a stock can't go lower and it gaps down 50% you've got a significantly higher probability of being assigned. Furthermore, you can't count on some small premie to keep you from getting assigned. People exercise puts a lot faster than they exercise a call. This doesn't mean don't sell puts, it means don't over-leverage. It means diversify both in your stock picks and in your trading strategies.