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

To: SAM who wrote (83474)	12/3/1998 11:06:00 AM
From: Don Martini	Read Replies (1) \| Respond to of 176387

Good Morning SAM! You are correct, 571% is wrong. Right number is 344% $66 less $48 = $18 net cost of stock after premiums collected. If Dell closes at $80+ in January 2001 the profit is $62 on 18 = 344%. You asked if one could lose on the put side. If the put is exercised at 80 your actual cost after deducting the premies is 32. Will you make a contract to buy Dell for 32 in 2001 if I pay you 48 now to make the deal? If put is exercised you take another 100 shares, average price is 66+32=96 divided by 2 = 48. You reduce the average cost of your stock by 27% from yesterday's 66. It get's better: Next year you'll probably be able to buy back the puts for $5 or so and sell higher strikes for $20-30, eventually eliminate all costs in the combination other than the risk that our favorite stock will fall. The technique is like others in the market, involves some risk. Happy investing, SAM, Thank you for catching my late night error! Don