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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: don kramer who wrote (2306)	9/11/1998 8:14:00 PM
From: md1derful	Respond to of 6439

DK: Still not too sure about the no risk, or limited risk scenario..lets say you are short the 40 puts at 1 1/4...if mo falls through 40, you will be put the stock, however if she continues to fall through 38 3/4 down to say 36, you've lost on the position..your risk is that the stock goes to zero and you can't get out of it as long as you are short the put...you may then buy back the put at a loss, of course( I know YOU know that)..I would agree with you that shorting puts is a wonderful and low risk way of buying a stock at a discount, as you are doing...but these shorts become risky if one is only dealing in the option itself without the intent of buying the stock. You also know that in terms of options the writers usually win over the buyers.