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To: Carmine Cammarosano who wrote (10733)	11/23/1997 11:27:00 AM
From: Quaddad	Read Replies (2) \| Respond to of 45548

Carmine, Here is an example of what I think he was trying to point out. Say stock abc is trading at $70/sh and you write a $75 covered call. You collect the cash from the call and then the stock drops from $70 to $35 prior to expiration. Yes you still own the stock and yes you collected the cash from the call writing, but you also took a 50% hit from when the stock declined. That's the risk I beleive he was trying to point out.

To: Carmine Cammarosano who wrote (10733)	11/23/1997 12:33:00 PM
From: Glenn D. Rudolph	Respond to of 45548

I do not understand what you are trying to say...for me selling covered calls is a very conservative move(you do not lose)although you cap your profits...selling naked puts is a lot more risky... Carmine, I do not wish to debate the issue. I am trying to say covered calls are a synthetic naked put. Your upside is limited in both cases and downside is the same. Think about it. I am not guessing at this. Options are far from new to me. Simply, covered calles is a bad idea unless the shares are in an IRA where naked puts are not permitted. This may help. What if the price of the shares for which you wrote the covered calls fall? Will you lose money? Would you lose more or less had the position been a short naked put? Glenn