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: Dennis Kern who wrote (109849)	3/17/1999 9:57:00 AM
From: PAL	Respond to of 176387

Selling puts is essentially buying stocks at a discount if you are assigned. But most importantly you have to choose a dynamic stock which will grow long term. If you do otherwise and the option gets exercised, you are buying a stock nobody wants. Your example of May50 puts, right now is about 8. If by May21st Dell is at 42 to 49 15/16, you are assigned. You buy at 50 minus 8 = 42. But if Dell is 42 or less (or much less), you are behind. That means at that time, Dell is showing a considerable weakness. Just like right now. I sold that Mar50 puts when Dello was over 100 (presplit), and now I am at a risk of being assigned. Therefore I am rolling to May50. I expect that Dell regains its strength by then. If Dell is above 50, you keep $ 8/premium. As edamo correctly stated, a nickel here and a nickel there, very soon you can buy an ice cream. Remember that when you buy calls you are bullish, and when you sell covered call, you are not bullish (neutral to bearish). Paul.