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

To: Kayaker who wrote (83518)	12/3/1998 7:56:00 PM
From: Don Martini	Read Replies (1) \| Respond to of 176387

Try this on for size, Bob Craig: I outlined 2 combos on #83453. The first allows less time for the stock to waver. At the Annual Meeting Dell hit 59 pre-split. Suppose you sold a Jan 120 straddle then, collected 42 [21 postsplit] for 6 months. Similar to the combo I exampled. Dell is 63, if its 63 next month, the put expires worthless The call is closed at $3. Original investment: 38.00 [59-21] Profit: 21-3 = 18 = 47% Bob, you're right, selling 2 puts would have paid better, but Uncle Frank inquired about buying calls. The Jan 120 calls were $20 in July, 10 postsplit; will be $3 in January if Dell stays where it is. The loss on buying these calls is 70% My approach probably works best on shorter term plays. The cash requirement of selling a put is offset by cash required to buy a call, and diminishes if the stock rises. Here are the consequences: 1. Begin with the other fellow's money in your pocket, no investment 2. Lower risk 3. Excellent return if stock stays in same trading range 4. Not as profitable if the stock soars, you can lose the shares. but you can sell more puts on the way up. This AM I closed 70 MSPG and DELL puts. Made 10K+. This time the Tiger didn't eat me, but he may have a piece of my foot as I'm still short 45 contracts. 35 are offset by calls in straddles, for which I'm thankful. If the market continues to fall I'll sell far out puts for bigger premiums. What smarts are the Dell 60 calls I bot for $8. They're hard to roll out! The puts are easy to roll and bring more money in. Thank you for the complimentary post, Bob. I welcome your critique! Don Martini