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To: JBird77777 who wrote (100154)	2/16/1999 10:42:00 AM
From: edamo	Respond to of 176387

appreciate your technical assistance... on the query to me on risk of having an option put to you....have been a net seller of puts for years...chances are almost the proverbial "slim or none" at an issue being put to you, not only for the accurate reasons you state, but by the strategy of the seller, to roll forward, reset the position, and take in an additional premium...the advent of leaps makes the strategy more simplistic, because it gives a safe haven time horizon, that goes far beyond the longest recorded bear markets....it is safer to sell puts, than to write covered calls, the covered calls unless deep, give an opportunity loss...the put never does...

To: JBird77777 who wrote (100154)	2/16/1999 10:46:00 AM
From: BGR	Respond to of 176387

JB, A DITM put on a non-dividend paying stock might be exercised prior to expiration, if the interest rate is sufficiently high. Let's consider an extreme example (taken from the book Derivatives by Fred Arditti) where the strike is 100, stock is at 1, expiration is 1 year away and interest rate is 20%. The put price is therefore slightly less than 99, say 98.5. Ignoring spreads and commission: 1. Sell the put and invest the money at 20%. Gain = 98.5 * 1.2 = 118.2 2. Hold the put to expiration. Max gain possible = 100. 3. Buy the stock and exercise the put. Gain = (100 - 1) * 1.2 = 118.8. Therefore the best option is #3. -BGR.