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

To: Lee Penick who wrote (13431)	12/16/1997 1:25:00 AM
From: William L. Oppenheim	Read Replies (1) \| Respond to of 70976

Yes, it helps quite a bit. What eventually happens in January when the put is exercised. I suppose you are no worse off than you are with the Dec 35 except that you have earned a slight credit. Of course, you could be forced to buy the stock at 35 at any time up to January so your position is not really all that much different, and there is always the chance that things could deteriorate even further in the interim--which is why someone is willing to pay a premium for the time value of being able to stick it to you over an ever longer amount of time. Rolling forward has simply extended your liabilty further for an extra premium. You could have sold the Jan 35 to begin with and saved the extra commission--if only you had known what the market was going to do. Funny thing about hindsight. I suppose that when the market is heading your direction, rolling forward keeps the streak alive.