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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: dealmakr who wrote (199083)	4/30/2009 8:42:46 AM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

>>>Selling cash covered puts (naked) isn't any more risky than buying put premium outright as your cost of ownership in the underlying is established when the trade is put on. <<< I am not quite following you. A cash covered put isn't naked. It is covered by the cash. If the put drops ITM, and you are assigned, then you have bought the stock - become long - and you bought it with the cash set aside to secure. You can then lose all of that if the stock drops to zero. If you buy the put, you are taking a bearish position as opposed to the cash covered put where you are long. All you can loose by being long the put is the premium you paid.