Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: GVTucker who wrote (104269)	2/23/1999 4:40:00 PM
From: edamo	Read Replies (2) \| Respond to of 176387

cboe trader....would appreciate a real world example, so to better understand.. margin...are you an advocate of using margin to go long the common? agree a collateral requirement...and when selling puts, one should always have the capacity to accept the underlying...but interest free cash in always better than borrowing with interest....selling puts never generates a margin balance, and there is no margin interest to pay....a much better situation in my humble opinion... real world case...i sell puts against cash...get much,much,much better than t-bill rate returns on cash...market down my cash position same...never have to meet a margin requirement...i know my downside and the price i must accept at...no more, but less because the initial premium reduces my cost...i accept the underlying or the put can be restructured by rolling out to a more favorable strike and expiration, how do you suggest the same with a margined long position... your premise of borrowing to buy the common....stock goes down, have a margin call, must add cash or be sold out....am i missing something??? appreciate your comments...ed a.