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 : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: John F. Dowd who wrote (6594)	3/27/1998 9:11:00 AM
From: Zbyszek	Respond to of 19080

Bid 31 5/8 Volume 19900 Z.

To: John F. Dowd who wrote (6594)	3/27/1998 10:19:00 AM
From: DanZ	Read Replies (1) \| Respond to of 19080

John, With regards to your statement: 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. You are correct, but the point I was trying to make is if you buy Oracle at 31 1/2 and it goes to 25, you have a loss as well. From that standpoint, the only difference between selling naked puts and buying the stock today is that you would pay 29 7/16 rather than 31 1/2. I'm not advocating selling naked puts. I was simply trying to point out the advantages and disadvantages of doing it. I don't think it's a good idea to sell naked puts unless you are planning to buy the stock anyway. If it goes down and you get exercised, you have a lower cost basis than if you bought it today. And, if the stock goes up you keep the premium. As I said, the main drawback is that your upside is limited to the premium. Your downside risk is the same as if you had bought the stock. Dan