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To: Ira Player who wrote (64382)	8/7/2003 7:51:12 PM
From: rkral	Respond to of 77399

OT ... Ira, re "Nothing can happen in the known universe to change the relationship in options that for every penny an option changes price, there is a winner and a loser of that penny." That's quite obvious .. and also a simplistic application of the phrase "zero-sum game". I thought it might mean more than that. Maybe it doesn't. I was trying to extend that principle to expectations, as in statistical expectations in the Black-Scholes option model. That's why I said " "Zero-sum game" implies that both writers and buyers can expect* to end up with $0 gain/(loss)." .... as opposed to "option writers can expect* to pocket the time-value (portion of the premium) and option buyers can expect to lose an equal amount. re "In theory, the option writer (seller) will receive premium and keep some or all of it a significant majority of the time." I share that opinion. In fact, as I posted to Frank, and stated above, I believe the option writer can expect to keep the time-value. All of the above is before paying for commissions, taxes, and spreads (as you correctly added). re "Covered writers have the advantage that they are losing potential gains, not actual cash. However, the premium or partial premium they get to keep for most transactions is cash in the bank." Again, I agree .. as long as the option writer intended to be a long term holder, even during a major price decline in the underlying. Regards, Ron