Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: davesd who wrote (10226)	11/2/1997 6:37:00 AM
From: Steve Byers	Read Replies (1) \| Respond to of 70976

and two other minor points regarding options strategies... one is that you will have to put up additional margin when the strategy is either uncovered or not hedged, and if at least one side is short (written)... ie, if you are naked the put, you will need to put up margin which is formula based, but could require the premium PLUS the in the money amount PLUS 20% of the underlying... depends on the firm you are using to trade, but always ask what the margin will be to set up the strategy and ask how margin changes as price changes the other is that unless you are deep in the money, especially when there is a lot of time left on the option... it does not trade dollar for dollar with the cash price... so that if your call is8$ out of the money and the cash price moves up $3... and you have 9 months to go on the option... the call might go up 1/4, or 1/2 a point... so if you wanted to sell, or had to at that point, you haven't captured the current movement... and will simply pay the bid/asked spread... so just a little disclosure, BUT agree that if you don't need the money, it is fun to trade options, educational and can be profitable, as long as you REALLY understand all the risks and differences vs the underlying... its NOT for everyone with money... just my opinion