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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (5806)	1/19/1999 8:29:00 PM
From: Freedom Fighter	Respond to of 78491

Jeffery, >>Wayne, I do not like the idea of selling naked calls. You do NOT get the downward movement if the price drops, just the call premium. This is antithetical to the idea that you have picked a virtually worthless stock. Also you may have some not insignificant margin requirements on the position.<< I don't want to get too hung up about options because that's not what this forum is about and I already probably went overboard. My only reason for posting it originally was because I think it is an alternative to shorting (which some people were discussing) that can limit some of the losses when you are wrong about the stock because you collect premiums. To solve your problem, you call sell in the money calls and capture all the downside you feel is appropriate and still get a small premium. It's just an alternative. Wayne