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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: Howard R. Hansen who wrote (2079)6/11/2001 8:46:06 AM
From: Joe Waynick  Respond to of 2241
 
Howard please let me clarify. I should have said, "the risk/reward ratio of naked puts is equivalent to covered calls." You have an equal chance of making a profit as you do taking a loss, since the downside and upside are equivalent.

The broker has no greater risk when clients write naked puts because if you don’t have sufficient collateral in your account to cover the margin requirements, the broker won’t allow the transaction.

Joe


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