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Strategies & Market Trends : Stock Attack -- A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: dennis michael patterson who wrote (13507)	7/31/1998 11:41:00 AM
From: Robert Graham	Read Replies (1) \| Respond to of 42787

What is so important about naked calls?? Naked call selling is just one of many tools. The idea here is to use the tool that is the most appropriate for the stock and your objectives. And it is important to use tools that you are familiar with in this volatile market. I understand the advantage of being the writer instead of the buyer. But keep focused on the profit to risk profile of the trade. Or put another way, if you cannot explicitly evaluate the profit to risk profile of a trade, then do not make that trade. If there is using this measure a high risk, then you definitely do not want to write naked CALLs. Some of this risk can be managed through watching the tape and technicals on the stock as the stock is hitting resistance like YHOO for instance. Timing is one important way of managing the risk side of a trade upon entry and managing the profit side on choosing your exit. Bob Graham