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To: Chris who wrote (5178)	1/23/1999 3:15:00 PM
From: Gersh Avery	Read Replies (2) \| Respond to of 11051

Chris Re: Covered puts short position in XYZ and sell (covered) puts is the same tactic as having long position and buying puts. Almost, but not quite .. think of who gets the premium .. It might be considered the same as owning the stock and writing calls. The seller of options works with the clock .. the buyer fights the clock. The buyer preys for volatility .. the seller hopes that the stock stays somewhat flat. Consider the 120 Feb AMZN calls .. they closed Friday at 18 1/2 ask with AMZN closing at 123. If AMZN closes below 138 1/2 2/19/99 it is a loss for the buyer .. anything below that makes it a gain for the seller .. the same would hold true for sellers of puts. As brokerage firms and market makers tend to be sellers of options, the market has a tendency toward making as many of these expire worthless as possible. At first glance shorting both put and stock would result in a one for one movement but there's big bucks involved in the premium. Gersh

To: Chris who wrote (5178)	1/23/1999 5:07:00 PM
From: MonsieurGonzo	Respond to of 11051

Chris; RE:" a covered PUT is... " ...covered by an outstanding short sale of the underlying. good grief, I never considered that; makes sense. >My question is why would someone really need to do this vs. close the short position ? hmmm... now understanding what it is (thanks, Chris) -- ...to "cover" the short sale of a stock, which would be the actual position, not unlike (since double-negatives are en vogue) "covering" a long position of stock with a short CALL; ie., "insurance" of a long-term short position. ...to exit a short sale of stock position: you get paid for covering; again, like selling a CALL to exit a long stock trading position. ...to "leg into" some form of spread position which may consist of multiple strike options of various kinds. ...index arbitrage. Have no idea why DJ would initiate a covered PUT, though -? -Steve

To: Chris who wrote (5178)	1/23/1999 5:54:00 PM
From: Berney	Respond to of 11051

Chris, sorry if I added to confusion. I have not yet tried it. However, it seems to me that if I take a long position in a stock that I believe is in a break-out, why not sell puts to those folks that would like to "bet" that the stock is going down. Berney