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Technology Stocks : INTEL TRADER -- Ignore unavailable to you. Want to Upgrade?

To: Chris who wrote (5193)	1/24/1999 9:46:00 AM
From: Gersh Avery	Read Replies (1) \| Respond to of 11051

Chris I haven't even paper traded this one. Worst case would require the person to own 9500 shares of the stock and have $611.5k cash to do this set of ratchet sell. That said .. at the end of the series you would have 7500 shares of the stock put to you at an average price of 79 2/3 reduced by the premiums collected = ~68 9/16. BTW Error in the last set of numbers that I posted. There were 20 contracts sold at the 85 strike not 10. Now additional considerations .. profits from sales of covered calls are tax free. In addition the shares put to you at higher prices than current could be sold at once and produce a tax loss .. You then have more cash in your account than you started out with and a paper tax loss. (I'm sure that Berney will correct me here if I'm wrong) So then .. worst case: 9500 shares and $611,500 cash to start .. and if you're at a place in life that you could do that and your broker requires you to put up that much .. welll .. IMHO it's time to find a new broker. Returns : $26k cash and (9 2/3 * 7500) $72.5k tax loss (I've got no idea of the tax implications of the tax basis of the puts that were sold .. Berney?) "I've got to much time on my hands .." <g> No .. I've never sold a single option. See my next post later. Gersh

To: Chris who wrote (5193)	1/24/1999 12:54:00 PM
From: MonsieurGonzo	Read Replies (2) \| Respond to of 11051

Chris; RE:" Naked PUTs " >Do you write naked puts/calls? Etrade does not allow naked call writing... hmmm... I write naked PUTs on ETRADE all the time, Chris. ETRADE will allow naked CALL writing if you qualify, I believe, though I never write naked CALLs and do not have that level on ETRADE. >What are their cash requirements ?* so far as I know, cash required is = the kapital required if assigned; I've never not had the cash on-hand so, I cannot say if E*TRADE will execute naked options based on "buying power". Jurgen once referred me to Pacific Brokerage Services for options smartlink.net edreyfus.com -Steve

To: Chris who wrote (5193)	1/26/1999 3:17:00 AM
From: nihil	Respond to of 11051

e*trade won't let me write naked calls, although I've done it several times by mistake -- they really get pissed and make me cover, limiting my profit terribly, but I sell, or leg into a spread depending on which is more profitable. They say "your account is not" suggesting that someone else's may be. But uncovered short calls have unlimited potential for loss, no one can have enough margin to guarantee the broker against loss, so when they execute a uncovered short call for you they are taking on an unlimited contingent liability for them, and they don't like that at all. A rich broker (like MER) will have enough invested in the stock to take a flier on its own. But e-brokers usually have little capital, and probably are not interested in gambling for the tiny commissions and spreads that they can earn. I know of brokers (like MER) that will let you trade options in an IRA, but etrade and waterhouse won't. Different strokes ....