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Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: hdl who wrote (87204)	11/30/2003 11:22:46 AM
From: Rich1	Read Replies (1) \| Respond to of 93625

Hmnn....Not a bad idea..selling covered puts...Can you sell those in a regular option account...?? How about in an IRA or 401K??

To: hdl who wrote (87204)	12/1/2003 12:50:07 PM
From: Dr. Id	Read Replies (1) \| Respond to of 93625

your 3rd paragraph should say at $30 strike- to make clearer without thinking. btw- the $5,000 I think is taxed as regular income. You don't have to buy the stock at $30, because you have 1,000 shares. You are selling covered puts. You're right that the $5000 is taxed as a short term gain (regular income). However, if the stock is below 30, you still have to buy the 1000 shares at 30, regardless of whether you hold 1000 or 10000 shares. You have to have enough equity in your account to cover the 30k. If you were BUYING puts, they would be covered by your 1000 shares.