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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Gotham Guru who wrote (13796)	9/16/1998 4:13:00 PM
From: larry	Read Replies (1) \| Respond to of 18691

Instigator, Ha, that's exactly what I am thinking. See, my point is that, thanks to the great bull market, I have improved my portfolio to a certain degree that I am no longer interested in daytrading or short term trading, grabing one point here and there. All I am looking for is some consistent income. Since I am not going to use margin, I am not worried about margin call. If the market crashes, and someone 'put their shares of MSFT, DELL, LU to me at a 15-20% discount below current price, I am more than willing to take in...I don't see that we are in a serious bear market. And I am more than willing to bet that DOW will triple from current level before 2010. good luck, larry!

To: Gotham Guru who wrote (13796)	9/16/1998 5:36:00 PM
From: Kevin Podsiadlik	Read Replies (2) \| Respond to of 18691

Here's one reason why selling naked puts is probably not so hot. Let's say that your Oracle $20 put (you don't specify a time frame) nets you about $1 per (that's roughly what a March put would net you). So consider this: ORCL price on 3/19/99: Gain/Loss from selling Gain/Loss from buying 1 put (naked) 100 common (at $27) $10 -$900 -$1700 $15 -$400 -$1200 $19 0 -$800 $20 $100 -$700 $25 $100 -$200 $28 $100 $100 $30 $100 $300 $40 $100 $1300 $60(MSFT buyout) $100 $3300 The point is, sure, you're exposing yourself to much of the risk should Oracle turn into Cendant (or the bear market return) in the next six months, and almost none of the reward should good things happen to Oracle. And it only takes one trade gone wrong to wipe out the profits from a half dozen or more successful ones. James Cramer is not as diplomatic about it (subscription or free trial required): archive.thestreet.com A salient quote: "In 20 years of trading options I can tell you that I have pretty much seen everything that is going to happen and the only time I have ever seen people forced out of this business or had to be liquidated is because they sold puts. The only time."