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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?


To: Big Sky who wrote (13625)10/27/2000 2:58:33 PM
From: SJS  Respond to of 24042
 
Thanks Big.

Yes, you're math is correct, as is your intrinsic understanding the "selling put" process and risks/rewards. I am not so sure, though, about that STOP reasoning, but I'll let you deal with that.

However, there are ways to mitigate the risk of pure "naked" selling. Some of these strategies include bear/bull spreads, or strangles/straddles.

As well, many people understand the process of buying long stock and selling calls. (...called covered writing) The corrollary for the "other side" is selling stock short, and selling puts.

Steve