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To: freeus who wrote (109269)	3/12/1999 3:26:00 PM
From: edamo	Read Replies (1) \| Respond to of 176387

freeus,freeus,freeus...re:selling dell puts... congrats...your eyes are wide open...no need to consult black-scholes...the only question..."why would anyone pay me $17...to buy dell @ 50 in jan01...." the bears/investing challenged do silly things like paying a put seller a premium...use their money wisely.. i think you have it.....ed a. p.s....don't rush into spreads...remember "restraint,restraint,restraint....."

To: freeus who wrote (109269)	3/12/1999 9:14:00 PM
From: PAL	Read Replies (2) \| Respond to of 176387

Freeus: Congratulations. You are now a Jedi. You surely already know that even selling puts involves risk. Could you share the margin requirement for naked puts by your broker. Mine is Waterhouse securities. When the put is out of the money, the requirement is therefore less than if it is in the money. It is very difficult to get a consistent answer from the broker. I can only surmise the requirements: a. in the money put: 25% of underlying price plus the cost of the option. b. out of the money put: the greater of $ 500/contract or 25% of underlying price plus the cost of option MINUS the out of the money. I did not pay close attention when I started naked option, and suddenly when the market got soft, I got that "friendly" notice from the margin department (those people probably got their experience from working at collection agencies... vbg). If you are interested, I can post the risk of naked puts with a real example. Good Luck to you. Paul