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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: Sowbug who wrote (4560)	2/1/1999 5:07:00 PM
From: Rich1	Read Replies (1) \| Respond to of 19700

Please explain the downside risk other than taking the stock at a pre arranged price. Today I sold naked puts on RMBS $70 feb for $5. Am prepared to purchase the stock at $70.

To: Sowbug who wrote (4560)	2/1/1999 5:11:00 PM
From: SJS	Read Replies (2) \| Respond to of 19700

OJ, What I mean is that if you write 10, 120 Puts for example, and take in some money, you can buy 2, 5 or even 10 of the 100, or 90 strike Puts. You could even leg into the position, but that's risky in and of itself. It's a bull spread with puts, yes. I usually like to hedge 50% of the naked short put position with long puts just for some protection. Why? You saw this stock go from 155 to 80. I know it'easy to say "Sure, I'd love to own this stock", but that's easy to say in a raging bull market. If they raise the margin requirements again to 100%, you've got to come up with a lot of cash. Maybe that's easy to do, maybe not. As well, I also said that about "loving to own stock" right before we went into September... If ANY speculation about raising rates, or other rumors surface, INUTS could collapse. I think the markets a little fragile here. For a small cost, you mitigate the risk. As well, your downside is limited if you guess incorrectly. Just my HO. I know you're excited about being able to write puts, but it's alot harder than it appears. Have your cash ready!! Regards, Steve PS: One more level to go, then, for max status. Naked index writing. Get some experience with stock before you get approved for and try that....!! You most certainly want hedges with naked index writing.