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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (9931)	5/21/2004 1:51:37 PM
From: Sam Citron	Respond to of 25522

Hi Bob, One thing I like about naked put selling is that it imposes a certain discipline for me of buying the stock if the price declines to my strike price. OTOH, GTC orders are automatically cancelled by many brokers after only 30 days. With puts, I am paid simply to keep open a GTC order for a longer period of time. Frequently, in the absense of such a naked put sale commitment, I have been trigger shy when a quality stock had finally hit my desired price, due to fear of further price erosion. Essentially this kept me from accumulating AMAT in '02 in the 10-13 price range. I find that another option strategy that tends to work well in times like these is covered call writing. Net effect is the same: lowering cost basis of the position. I am currently long XLNX leap calls ('05) and short XLNX leap puts (both '05 and '06), short LLTC leap puts ('06) and am considering AMAT leaps. Sam