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To: Peter Yang who wrote (5156)	12/29/1997 3:02:00 PM
From: yard_man	Read Replies (2) \| Respond to of 27307

Good analysis except: When It drops below 60. You mean IF. Would this be called a covered short? Sale of the put provides limited protection. In addition you might consider an "inexpensive" near term call to protect with such a volatile stock. You could buy these near-term calls close to earnings releases. Actually been thinking of doing something similar with just the options on AOL. Sell calls, buy puts for same exp close to same strike. Use the credit generated to buy near term protective OTM calls while waiting for the stock to tank. This approach provides added leverage, and increased, but limited risk.

To: Peter Yang who wrote (5156)	12/29/1997 3:15:00 PM
From: Oeconomicus	Respond to of 27307

Peter, your strategy has the same shortcoming as covered call writing, i.e. limiting you upside, but leaving you exposed on the downside. You only come out ahead if the stock moves in your favor slowly enough that time decay eats away the option premium so that it expires worthless, then you write another put as the stock continues to drift lower. If the stock drops quickly, say next week, to $50 then you would gain on the stock and lose on the option. With 2 1/2 months to go, the option would trade for significantly more than $10, so you could not close out the position for a $14 profit as you thought. It would almost certainly NOT be exercised, so to realize the full $14, you'd have to sit tight until mid-March. On the other hand, if the stock rises quickly then your gain on the put would be dwarfed by your loss on the stock. Then, if you are forced to cover the short, you'd also have to buy back the put (adding insult to injury?). Hope this helps. Bob