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To: SJS who wrote (11006)	2/8/1998 11:14:00 AM
From: Ms. X	Read Replies (1) \| Respond to of 95453

Steve, A little off topic but still regarding covered writes. I have a friend who specifically buys a stock and writes it with full intention of having it called. He makes a lot of money that way. He never worries if the stock continues to move up because he has gotten his profits. If it moves against him he waits for the writes to expire and then does it again. I always thought that was a good idea. Just my thoughts... Jan

To: SJS who wrote (11006)	2/8/1998 11:50:00 AM
From: William L. Oppenheim	Read Replies (1) \| Respond to of 95453

I don't do options so I'm the last person who should be talking about this. My elementary understanding is that the strategy you describe, e.g. buy/write, mitigates both losses AND gains. A perfectly hedged position would go nowhere, but the commissions to construct it would make you a loser. This, as you suggest is not insurance at all, though a lot of option players like to think of it that way. It is really a way of using leverage to allow smaller amounts of money to do what larger amounts would normally be required to do. Leverage always adds risk. Thus the premiums paid buys leverage and risk as opposed to owning the underlying asset. Not only do you have to be correct about the direction of a move, but you have to be correct about the timing of a move. [Someone will point to straddles and the opposite of straddles to refute this, undoubtedly] Premiums collected by writers (and I agree tis better to be a writer) result in decreased risk but the tradeoff is decreased profit potential.