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

To: Drbob512 who wrote (318)	8/20/2000 12:58:52 PM
From: tommyhus1	Respond to of 100058

dr. bob & PAL-"I hope you will post options strategies again, because many here are not very familiar with the relative safety of writing options against the shares. Most are aware that buying options is very risky and that selling naked is even more risky." isn't writing covered calls virtually the same risk as writing naked puts? ie if you write a call you have to hold the underlying stock until you buy back the option or it is exercised? if the stock drops 50% you still lose that minus the premium for the call. a naked put will force you to buy the stock at the strike price, but if the stock drops 50% you are still stuck with the stock minus the premium. i think each are equally risky depending on the stock. writing naked puts on certain stocks seems almost as safe as covered calls in certain situations. close to expiration many puts still have a lot of value because of volatility. as long as the situation seems safe(market steady, no earnings report coming, etc.) one could make a decent return in a week. as long as you pick a good company you should be alright. of course this is mo, and i would like to hear other opinions as well. i cannot write naked puts but i would like to someday. tommy