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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Bill Jackson who wrote (73008)	3/2/2002 9:47:50 PM
From: Elmer	Read Replies (2) \| Respond to of 275872

One wonders why the big funds do not do this? or do they get into too big a position and blow off heads? I seem to have read about the hedge fund bloodbath we had. You should read some of the books on Warren Buffett. He writes puts on companies he wants to buy at a slightly lower price. Assume for a moment you want to buy AMD which is about $15 today. The trouble is you'd like to get it at a slightly better price. You could sell a March $15 Put for about $.75. That means you might get assigned AMD in 2 weeks for a net cost of $14.25. The worst that could happen is you don't get assigned and you just keep the $0.75. I say "worst" because in this scenario you were willing to buy AMD anyway. The downside is AMD could go to $20 and you missed your buy at $15. Don't play short options unless you're willing to accept assignment. EP