Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : America On-Line: will it survive ...? -- Ignore unavailable to you. Want to Upgrade?

To: Investor-ex! who wrote (9059)	3/26/1998 1:04:00 AM
From: Gary Korn	Read Replies (1) \| Respond to of 13594

More to the point, most people here (including me) can't write naked anything -- brokers won't go for it, though I haven't tried to run the paperwork through for that level of options trading in a while. Investor-ex, The conspiracy theorist in me thinks that this is in fact a conspiracy by the brokers to keep naked call (and naked put) writing all to themselves. Let's focus on naked puts. When you write them, you take in time premium. Worst case, if the stock tanks, and unless you unwind, you simply bought it at a discount to the price the stock was trading at when you sold the put. Where is the risk in buying stock at a discount? None. But it seems someone wants to make it seem like a big risk so we little guys don't get to take in any premium. Instead, what do they let us do really easily? Why, buy calls and buy puts. That is, pay out premium (to the MMs). However 80% of calls expire worthless. It sure seems to me that this is the far, far more risky bet. So, let me get this straight: My broker doesn't care if I buy calls that are doomed to expire worthless. However, I'm undertaking a huge risk when I buy stock at a discount? Give me a break! Gary Korn