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

To: PAL who wrote (111960)	3/24/1999 9:46:00 PM
From: edamo	Read Replies (3) \| Respond to of 176387

paul...re weary numbers.. i concede...the numbers blend together,,,especially when you are responding to similar postings but with different numbers.. let's do it without numbers...fully aware of all the machinations of options,volatility,black scholes,macmillan,bittman,roth,even wade cook..et al... any option should be viewed as an investment tool..an enhancement to an existing portfolio...unfortunately it is perceived as a speculation and highly risky...selling puts and covered calls less risky than buying puts, selling naked calls... in a static position the risk of going long versus put selling is equal. but the true dynamic takes effect when the premium is reinvested...the cash or capacity originally required does not sit idle..it too is conservatively invested..buy 220 shares of dell today...you have capacity, at least with my broker to sell an equal amount put strike, use the premium to buy additional 120 shares of dell...now you can see the dynamic taking place. the timing of the put sale and the long buy are critical...not a random act...do it at a high volatililty point which explodes the put premium and has tanked the underlying...you are taking the same bet as if you go long...but you've leveraged yourself at the optimum level...contrary margin leverage is available as the stock moves up...i'm not at all interested in projecting the premium, that can be done with black scholes...but even with b-s you must make some assumptions..i make a very basic assumption, forget about calculations...just ask myself if the fundamentals of the underlying strong enough to allow the underlying to move to the strike price at an established point in time....the ability to roll a profitable, or unprofitable put at the same strike only accrues additional premium, never debt as in margin usage...you can do it monthly, quarterly, yearly...whatever satisfies you...it is a simple concept...that is very rarely addressed by the "pros"...think it through with an open mind...don't allow the thought to be adulterated by convention...i've tried for years to find fault..it's been a constant earner/portfolio builder for a long time..up/down markets..but caveat only buy quality...await your input..thanks as always, ed a.