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To: AmericanVoter who wrote (6290)	4/11/2000 1:16:00 PM
From: Ritch	Respond to of 8096

Amein - The seller of the put sells for one of two reasons: 1. He wants to get the premium because he feels that the stock will be above the strike price at expiration. 2. He would like to own the stock at a pre-determined price at some point in the future. In your example, He would know that the most the stock would cost him is $89 ($170 put strike less $81 premium), if the stock is below $170 at expiration. The put buyer is buying insurance. He is locking in a minimum price for his stock of $89. If the price of the stock is below $170 at expiration, he gets to sell the stock to the put seller at a price of $170. He would then net $89 ($170 proceeds less $81 premium paid). If the stock is above $170 at expiration, he keeps his stock but loses the $81 premium he paid. This is oversimplified and condensed, but I hope this helps. Ritch

To: AmericanVoter who wrote (6290)	4/11/2000 2:10:00 PM
From: edamo	Read Replies (1) \| Respond to of 8096

amein...."assignment"....maybe yes, maybe no.... can't guess what is in the mind of the buyer of the put... all you know is your action... you sold 170.....not clear what your premium is...you have a profit at any point from 170 to less premium collected if assigned....below your adjusted cost you are in a loss position... the assignment takes place at expiration if the common is less then the strike....the only thing that matters is your ability to accept the contract and your adjusted cost basis.