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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (10737)	11/23/1997 3:24:00 PM
From: Beachbumm	Read Replies (1) \| Respond to of 45548

Glenn, the only problem I have with what you and Quaddad are saying is that you are assuming the investor will simply ride the decline all the way from 75 to 35. Why? The investor could easily buy back the calls he sold at substantial profit and still exit the stock long before it hits 35. I don't think the covered call writer will just fall asleep at the helm. I mean, you're correct about the synthetic put stuff, but there are very different approaches to the investment going on here. The put writer doesn't really want to be put the stock while the covered call writer is comfortable holding the stock and doesn't really want it called away. He's looking for income and making a bet that he is knowledgeable with the range the stock will trade in until expiration. I think Carmine is somewhat correct that the risks (in the mindsets) of the two different styles are lesser with covered call writing. Just my humble thought. Regards, Beachbumm

To: Glenn D. Rudolph who wrote (10737)	11/23/1997 3:30:00 PM
From: Chris Anderson	Read Replies (3) \| Respond to of 45548

Since everyone is trying to clarify everyone else, I'll jump in too! :-)) If Carmine is long the stock, and the stock is volitale, it may fall from $70 to $(fill in worst case scenario here) I'd rather have the $5 of call money in my pocket when it falls. If it's a great stock and you plan on being in a few years and riding out the bumps, why not try and pocket a little call money along the way? This decision really depends on your investing style. Also, if I have 5 or 6 very volitale stocks in my portfolio and write calls on the bunch and only 1 or 2 fall, the call money can really help out. I understand all of the implications about capping your potential gains, though, really hurts to see one fly off when you have a call written on it! I understand puts and I understand "naked" only as it relates to calls, so what is a "synthetic naked put"??? Chris