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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: edward miller who wrote (27351)	9/10/1998 11:14:00 PM
From: William H Huebl	Read Replies (1) \| Respond to of 94695

Ed, The point is, if you want the stock, you get it cheaper by selling puts and getting it if you are wrong (right), right? But if you guess wrong then could have gotten it even cheaper and with sell puts also at a lower price. Right? I think. Bill

To: edward miller who wrote (27351)	9/11/1998 11:39:00 AM
From: yard_man	Read Replies (1) \| Respond to of 94695

Compare simply placing a limit order for a stock with selling a put at the same strike price. That is a valid comparison. Limit order: If it hits the low price you buy the stock. Sell puts: If it hits the low price and stays below through expiry you get the stock, but you also get the premie. Your risk is reduced (in selling the put instead of a limit order) only by the premium you get (neglecting commissions). Otherwise the risk is the same. Of course the other side is better -- no exercise may still get you the premium even though the price has dipped below, whereas with the limit order you would have the stock slightly above where you bought. One has a profit locked (expired put); the other does not.