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To: Chuzzlewit who wrote (112241)	3/25/1999 12:45:00 PM
From: PAL	Read Replies (2) \| Respond to of 176387

Chuzz chuzz chuzz where is my Tylenol? Let us keep it simple. Marq Spencer has a straight formard analysis: Message 8505279 He shows that the Buy and Hold/long will be better if the price is higher on expiration day because you hold 100 more shares. What we have to take a look further is that: a. the example is just for way deep in the money and way further out put where there is no time premium. b. not all brokerage firms require 100% collateral on the put you write. See: Message 8510468 Of course we agree that one example can only be used to disprove and not to prove a theory. TTFN Paul

To: Chuzzlewit who wrote (112241)	3/25/1999 1:25:00 PM
From: edamo	Read Replies (1) \| Respond to of 176387

chuzz...clearer heads reign... "really no different than using margin with interest" that comment by you, my astute friend is the key... margin is best used as a stock appreciates, creating capacity to borrow against..BUT YOU DO JUST THAT...BORROW! you've leveraged yourself with an accruing debt...which doesn't go away until you sell a position or are forced to sell to satisfy..plus interest charges. cash is at risk with any investment...so that is a moot point.. leverage up with put selling is not accruing a liabiilty, but using a fixed liability many times over, up or down market as a cash cow... the generation of cash allows the put seller to purchase out right a long position...no encumburance as with margin... the long position can only be added to with new cash or margin borrowing...the put strategy gives new cash with established risk.. ignore the numbers on a single trade...for it is a cumulative strategy which affords constant cash inflow with no more exposure..the opposite of margin with the same leverage ability.. this is not a one shot strategy, it is a disciplined technique that starts slow, requires patience,as the initial positions will meet the criteria that you have stated...but as the rolls occur either up or down market the compounding effect kicks in... buy low / sell high equates to success in investing..the strategy assures that...optimum put sale at a low, as optimum long buy..... no "pro" addresses the strategy in any publication...the "bible" by mcmillan only states:" that naked put selling is more strategically advantageous than covered call writing"...bittman writes: "the maximum theoretical risk of writing a put equals purchasing the stock at the strike price less the premium received. the risk assumed by stock purchasers varies depending on purchase with cash or margin. the cash purchaser risks 100%, the margin purchaser all invested capital plus the amount of the loan"...cboe "options...13th edition" ..." the investor who stands ready to purchase the underlying security is not speculating. this investor has the capital necessary to establish a long position in the underlying security.the assignment making him long the stock may not be his goal, but it is not a cataclysm either".....now we have established the nature of the beast per the "experts" (who really cares..not i) what is not addresed is what to do with the proceeds...if you are selling a put, you must assume a bullish posture on the underlying, you set the position at the best time, go long... sort of like an employer contribution to a pension plan...only the employer is the options trader... never violate my previous stated rules, focus on few issues with a goal to amass many shares of few quality stocks,look at it as an additive concept...not a single position...it works...up or down never got burned...and if the put is assigned "not a cataclysm"...as per rule #1.....pass the coffee...thanks, ed a.