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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Id who wrote (1087)	6/19/2001 6:22:15 PM
From: FaultLine	Read Replies (1) \| Respond to of 5205

Dr.Id@awaitingyourdecimationofmyargument.uhoh That's OK Mike, I'll handle this... The Fast Fourier Transform (FFT) is a DFT algorithm developed by Tukey and Cooley in 1965 which reduces the number of computations from something on the order of N02 to N0 log N0. There are basically two types of Tukey-Cooley FFT algorithms in use: decimation-in-time and decimation-in-frequency. --dfl@thealgorithmyouwereusingwasbyfrannyandzooey.com

To: Dr. Id who wrote (1087)	6/19/2001 6:36:13 PM
From: adairm	Read Replies (3) \| Respond to of 5205

<<selling 10 puts on the $14 stock can result in a 14k loss, as opposed to a 110k loss>> True enough, but wouldn't the person who had the margin to sell 10 puts on a $110 stock sell 100 contracts on a $14 stock? When I put on a position like this, I buy the number of shares (and sell the CC's) it takes to get round lots to meet the amount of dollars I want to put into the play. Besides, what stock is selling for $110 right now? Has Berkshire Hathaway come down that far? <grin> Oh, yeah, maybe the Class B's... Here's the risk with selling puts and getting assigned: Most people use their margin to secure the puts if excercised. Right? Let's say the stock is at 20, and they sell a 17.5 for a little premium. Maybe get a point. The stock goes down to 15, and the contract gets excercised. Now, assuming that you didn't go and spend your premium, you own stock worth 15 that you've paid 16.5 for. On margin. If it continues to fall, you just might start getting margin calls from your broker. And you might just be forced to sell some of your precious "cheap" shares for less that you think they're worth. Next thing you know, your account has spiraled down to heartbreak levels, that margin draining your capital. Adairm@howdoyouthinkIknowthis.exp

To: Dr. Id who wrote (1087)	6/19/2001 6:43:12 PM
From: FaultLine	Read Replies (1) \| Respond to of 5205

So what difference does attending so closely to valuations make if you're so reluctant to ever sell? OK Mike, I've had my fun. Now it's your turn... --dfl

To: Dr. Id who wrote (1087)	6/19/2001 11:20:19 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 5205

Id, When the question of selling comes up, you'll argue against it by bringing up tax consequences. So what difference does attending so closely to valuations make if you're so reluctant to ever sell? I agree that it can make a difference in buying strategies, but then if you attended closely to valuations you wouldn't have bought any tech stocks in the last 3 or 4 years. If you want to pursue that line of questioning, copy it into the G&K thread where it is appropriate and I'll be happy to follow up. It's not germaine to this thread. --Mike Buckley