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To: Georgeb who wrote (16456)9/28/2000 9:33:12 PM
From: Ian@SI  Read Replies (1) | Respond to of 21876
 
George,

I've never written a covered PUT in my life, nor do I intend to start anytime soon.

I prefer naked PUTs which have their own drawbacks especially when the street doesn't share my bullish outlook. :-( And I'd be overjoyed if I was only short 72 contracts in each of my positions except for the one biotech that's currently about $50 out of the money and will expire worthless next month (Nov).

Point was: There is such a thing as a covered PUT. Period. No investment advice to anyone was, or is, intended.

ian.



To: Georgeb who wrote (16456)9/29/2000 8:07:10 AM
From: M31  Respond to of 21876
 
To get the nuances straight, from Options as a Strategic Investment by McMillan:

"By definition, a put sale is covered only if the investor also owns a corresponding put with striking price equal to or greater than the strike of the written put. This is a spread. However, for margin purposes, one is covered if he sells a put and is also short the underlying stock."


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