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To: AreWeThereYet who wrote (729)	1/24/1998 9:15:00 PM
From: Sword	Read Replies (1) \| Respond to of 886

Andy: You are right on all of your points. As to your last question, "So is 'selling options' which I don't own equal to "write the [covered] options?", the answer is definitely not. The risk is substantially higher with the first. Therefore the SEC will not allow you to write (or sell) naked options without first filling out a special options agreement. This aggreement must state that the objective of your investment style is "speculative" or they will not grant you the priviledge. Futhermore, the rule governing the amount of equity that must exist in your account prior to the transaction is 50% of the underlying security plus the option premium. To clarify further, the following transactions can take place: Transaction Risk (1) Write a covered option to open a position Low (2) Write a naked option to open a position Very High (3) Buy an option to open a position High (4) Buy an option to close a position (prev. written) not applicable (5) Sell an option to close a position " " I'd stick with number one if I were you. In your example, I would just buy the stock and not wait for it to decline to $20. Your profit would be higher. Put option premiums are lower than call option premiums. You wouldn't gain much and, in fact, you will probably miss out on some significant appreciation. SMTC is a great stock! And now is a very good time to buy it. Regards, Jerry