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To: DanZ who wrote (6592)3/27/1998 8:55:00 AM
From: John F. Dowd  Read Replies (2) | Respond to of 19080
 
Dear Dan:

That was a nice post on naked puts but it really doesn't emphasize the downside risk fully.

You say, " All you are really doing is guaranteeing that you can buy the stock at a price of 29 7/16 if the put holder exercises them."
Suppose the stock finds itself at 25 the day they are put to you at 30 you are now paying 29 7/16 for a 25 stock. Is this not a possibility and is this not why people buy puts as well?

JF Dowd


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