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To: DavidG who wrote (31114)	10/25/1998 1:03:00 PM
From: Satch77	Respond to of 95453

Your down side on selling naked puts is the price of the stock below the strike price you sold the naked puts at. Example, if you sold the dec 10 puts for GLM, your down side is that GLM goes to zero and the puts you sold can force you to buy the stock for $10 a share (when it is worth zero). Your profit is the premium you receive for the puts, or the loss (if the stock trades below the strike price at expiration) is $10 minus the price of the stock at expiration minus commissions plus the premium you received for selling the naked puts. Selling naked puts can be a conservative way to deal with options, but you need the equity to back up your trades. You can also figure opportunity costs in there. Satch

To: DavidG who wrote (31114)	10/25/1998 8:43:00 PM
From: dealmakr	Respond to of 95453

DavidG, Downside can be looked at in 2 ways in selling naked puts. First is that the stock you want to buy never goes down to your strike level and you miss your entry, you keep the premium though. Next is that the stock you want to buy continues to go down from your entry after exercise and you could have bot it cheaper. If you are looking at a longer term hold and would purchase RON @ 30, selling a put maybe into market weakness could get you your entry at the price that you would be willing to pay at a little bit of discount to your price. Dave