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

To: im a survivor who wrote (1769)	9/16/2000 11:09:34 AM
From: Jill	Respond to of 65232

NO! It's best to sell puts in an oversold stock or market. Not when the stock or marekt has momentum behind it unlesss its an unusual situation like QCOM's meteoric rise, but how do you know it will keep rising? You look for high volatility, i.e. a selloff on a stock that has a lot of volatility, because you get good premiums then. Just as in selling cc. All calls and puts have inflated premiums during periods of high volatility. So you're getting more bang for your put buck, so to speak. For instance, EXTR has a lot of volatility, You cna trade puts just like selling ccs and buyin them back. Thus you could've sold puts on EXTR when it fell into the 70s recently, and in fact, you couldjust buy the darn put back a few days later for much less when EXTR got back into the 90s. I would not say the primary reason fro selling puts should be to get put the stock at less, because you just cannot predict where the stock will be on expiry. It works sometimes, but the key is to sell puts on a stock for which you have the capacity to buy (cash, i would say) and would be HAPPY being put, but your primary goal is income of the premium.