Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: Herm who wrote (13765)	7/9/2001 10:30:25 AM
From: TimF	Read Replies (2) \| Respond to of 14162

Well Tim, I guess you are more at ease with the use of margin than I am. That depends on how comfortable you are with a little bit of margin. I would not be as much margin as my hypothetical example. It was 50% margin. That would be too much. My point was if you where allowed to use 50% margin buying a stock (and you are but it would notmally be fairly stupid to do so IMO), then you should be able to sell a ut that if exercised would put you at 50% margin. Margin requirements were raised during the recent meltdown forcing the owners to sell into downward falling prices. Not a pretty picture. I would hate to see naked puts in added to that scenario where the investor can't react fast enough to cover all the bases when they are gripped with shear fear. The margin situation faced when you are put the stock would not be any worse then what you would face if you had bought the same amount of stock on margin in the first place. So I think that if you are allowed to buy stock on margin you should be allowed to sell naked puts. I would only sell the naked puts if I was willing to own the stock at the strike price of the puts, not as a speculation that it will never reach those prices. Tim