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To: edamo who wrote (96413)	2/9/1999 3:11:00 PM
From: BGR	Read Replies (1) \| Respond to of 176387

edamo, The assumption of course is that the market has an upward bias. That doesn't always hold true in the short run. For example, don't forget that writing puts on the S&P500 wiped out Victor Neiderhoffer (who probably had more experience in this kind of things than most SI posters combined) in Oct '97. I would rather sleep well at night that be an insurer of other persons' dreams. -BGR.

To: edamo who wrote (96413)	2/9/1999 3:29:00 PM
From: Don Martini	Read Replies (1) \| Respond to of 176387

APPLAUSE!!! APPLAUSE!!!

To: edamo who wrote (96413)	2/9/1999 4:01:00 PM
From: Don Martini	Read Replies (1) \| Respond to of 176387

Writing naked puts to raise a trade price, simple technique Last month I bot some AOL, avg 155. Immediately sold some 2001 leaps, 140-160 spread, received $100 On this combo the calls are covered, puts naked. Net cost of stock $55 As AOL goes up I expect to close the puts for small price & sell others with higher strikes and premiums. Eventually get into a zero cost basis for the shares. Today sold un-optioned AOL shares for 150 And sold March 165 puts @ 26 Effective yield: $176 Or: net cost of $139 if it's put to me next month Either way is better than a straight sale at today's price. I have some insurance against further price erosion and if AOL really tanks I'll roll the puts out and down, bring in larger premium & reduce exposure. "I'll pay you less later [if I pay you at all] providing you pay me more today." That's a put rollout & down in action!