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Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Wood who wrote (17466)	5/13/1998 9:25:00 AM
From: Scott Violette	Read Replies (2) \| Respond to of 25960

Steve, I have had a similar experience with writing calls that Zeev has had. It has been very profitable. IMO, Some differences that I see between selling naked put and covered calls. Usually naked puts are leveraged beyond a person's means. When covered calls are sold, the investor usually has their money tied up in the stock reducing the leverage available and also increasing the awareness of the risk. Although selling puts and covered calls function the same (limited upside, exposed downside), the covered call seller is involved with stock for awhile and more knowledgeable on the stock. There are several other soft reasons they are usually different. Basically, the biggest long term benefit of selling options is you collect money for time and you let people gamble and you are the casino(house). You benefit by indulging a person's weakness to want to get rich quick. Not many casinos going out of business. You do not win all the time but, you win most of the time.

To: Steve Wood who wrote (17466)	5/13/1998 9:35:00 AM
From: Zeev Hed	Read Replies (3) \| Respond to of 25960

Steve most people on this thread hold the stock through fire and deluge. In this case, writing out of the money (or close in the money calls) simply reduces the profits (in case of a rise) and the losses in case of a decline. But hen you do it consistently, and when called away simply reestablish your position, you will on average make the time premium money on the stock. If you want to be a little more subtle, you buy a stock near the bottom of a trading range and sell the call after a point or two rise. But this requires timing expertise, which, I agree with Curly, no one can do consistently. That is why a covered call writer should do it consistently. Zeev

To: Steve Wood who wrote (17466)	5/13/1998 10:11:00 AM
From: slipnsip	Read Replies (2) \| Respond to of 25960

"A covered call is just a synthetic naked put. The risks are, for all intents and purposes, the same. Yet for some reason, writing naked puts is considered very risky while writing covered calls is not." Please tell me you are kidding. Somwhere along the line you forgot about the long stock position required to write "covered calls" thus you are covered on the downside. Downside is no different than that of holding the stock by itself. Actually less due to the premium you get from writing the call.