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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?


To: Dom B. who wrote (53156)9/18/1998 1:14:00 PM
From: Jorge  Read Replies (3) | Respond to of 58727
 
Dom...Thanks...IBD said selling a put on a stock you would like to own anyway, at a cheaper price, is another way to make money...They said you should also buy a put at a lower price in case the bottom falls out..Then you could "put" it to someone else..You then are really only risking the spread inbetween, some of that even lessened by the selling premium you received when you sold the one put..

They suggusted you should sell a put on a company you want, only if it is trading above it's 200 DMA.. somewhat of a protection stock may hopefully bounce off that and you would not ever get assigned..They, of course suggested doing this only on strong companies, not likely to penetrate the 200 DMA.

I'm sure you know this already, but I found it very interesting..and am now in the process of looking into companies to do this with...INTC wouldn't be one of them...That sector is too fragile--200 DMA too likely to be breached (in fact I'm not even sure INTC is trading above it's 200 DMA anyway, which would fail the first requirement set out by IBD).

Regards, George