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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Don Martini who wrote (76435)	11/4/1998 10:37:00 AM
From: PAL	Read Replies (2) \| Respond to of 176387

Don, my broker requires that we have enough cash to cover at least 30% of the strike price. We can use the equity in the account for that. If we are assigned, the broker can advance margin to buy the stock. Therefore, there is a limit as how much we can sell naked puts. For those contemplating selling Dell puts, if you are at the margin limit, just becareful. As long as the market moves north you are OK. But should a downturn happens, you can get a margin call based on the exposure of naked puts. In that situation, margin call is very nasty unless you have cash to cover, then you have to sell good stocks at bargain prices. I agree with you Don, that selling naked puts on Dell is a profitable venture since the buyer has to pay premium - which more likely will become worthless (I have a lot of exposure myself for Nov puts - short that it). Nevertheless, caveat emptor. Make sure your financial situation can weather a storm. Regards PAL