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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: im a survivor who wrote (1765)9/16/2000 10:53:36 AM
From: Jill  Read Replies (1) | Respond to of 65232
 
I used to sell puts regularly and always pocketed the premium becaues I'd study the trading range and sell below what I thot the range was--or rather--what it had consistently been. I had open put positions in various stocks I liked, various strike prices an dmonths, some a bit far out.

Until APril, my god. Suddenly I'm watching those puts do the reverse of what a call does--you buy a call for 2--it goes to 20--well suddenly it would have cost huge amoutns ot uby back all those puts, or impossible amoutns ot exercise them all.

So I guess if you do it judiciously--you want a particular stock, you have the capacity in CASH (not margin) to buy it, then you will probably be okay. Its a useful strategy, I don't deny that, but when I look at what has made me the most $ in recent years, it was buying calls, or just holding stock.



To: im a survivor who wrote (1765)9/19/2000 1:07:26 PM
From: NickD  Read Replies (1) | Respond to of 65232
 
Another method that is "supposed" to work, is to sell the put at a price well above where the stock is. This should give you a healthy premium, which when subtracted from the put price, is lower than the current stock price. Supposedly the market makers will jump on this and exercise the put. This will get you into the stock at a discount from the current price. I've never done this. Can anyone vouch for the validity of this scheme?


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