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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Andreas who wrote (17890)	2/22/1998 7:11:00 PM
From: Mike Gordon	Respond to of 97611

<If you write the March 35 or 32.5 puts are you not concerned that the stock mighty shoot up to 40 in March? Then obviously your stuck buying cpq at 40.> Andreas: Sorry for the late response. It doesn't work like that. When I write the 35 or 32.5 March calls, I keep the premium if the issue goes to 40. The only time I buy the stock is when the issue goes below the strike price. In other words, by writing the put, I promise to pay the put holder the strike price of the stock at the Option Expiration day. Therefore, if I would have written the March 32.5 Put on Friday, i would have received 7/8 or 2 for the March 35 Put. On the march expiration day, if the issue is below 32.5 for the 32.5 put or 25 for the 35 put, I will own the stock. Concerning your question about commissions, normal rate would apply through your broker. If you trade through a discount broker, I assume the commission would be discounted. Mike Gordon