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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: freeus who wrote (97389)	2/11/1999 4:45:00 PM
From: edamo	Respond to of 176387

use bgr's experience as a test case...losing 96%..there was someone on the other side of the trade (seller or writer) who benefits from his loss... if a stock is called away it is done so at a value higher than the market when you wrote the covered call....worst case you make money one is not afraid to risk capital by buying options, which intrinsically have a time factor...you know your maximum risk is that you can lose your total investment....no risk in writing a covered call as explained above...or a put against cash on an issue you would buy anyhow...wouldn't you like a discount on your next dell buy? you sell your covered calls when the underlying is overbought, your puts against cash when oversold...this gives you an ample cushion and results in a high win percentage on 1/20 i sold dell feb 75 puts (symbol dlqno) and received 200 per contract. the common was at 85.25. someone paid me 2/share to put dell to me within thirty days at a price 15% below the market. the buyer justifies it as insurance, but common sense to me is that i think an issue will tank, why pay someone so i can take a deep loss, when i can blow it out at the market? conversely i sold on 2/4 dell feb 130 calls(symbol dlqbf)and received 100 per contract, the common was at 105...i have no risk if if my common was called it would mean dell ran 25 in two weeks....if i didn't want to lose my common i could always buy back prior to expiration....and all it would do is adjust my underlying cost basis upward....no pain...pure gain!