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

To: Ibexx who wrote (113857)	4/1/1999 12:41:00 PM
From: PAL	Read Replies (2) \| Respond to of 176387

Ibexx: Just tell that to hdl who shorted Dell and has split 4 times (sixteen fold) ans still holding. The risk of a short is unlimited. If you sell puts, the risk is the strike price minus premium. Let us just say that you sell Dell May50puts at 10. Suppose on expiration day Dell has no value (why am I suing Dell as an example and not CPQ? Because I am more familiar with Dell options), the maximum you can lose is $ 40/share. On the other hand if you short Dell at 41 and a few months from now Dell is at 200 or more, you will lose $ 159/share or more. The above examples are extremes as realistically we do not expect Dell to reach $ 200 or more in a few months, but that will be zero in May is highly and extremely improbable (to bemathematically correct). Edamo is right. I have never given a thought of shorting versus selling puts. But he is absolutely right. Paul

To: Ibexx who wrote (113857)	4/1/1999 1:45:00 PM
From: edamo	Respond to of 176387

ibexx...obfuscated vision of the broker(age)... my point exactly....a brokerage will allow a client to assume a high risk position, which can quickly turn against them....but deny them the ability to sell puts due to lack of experience or net worth... i think it is based on the brokerage attempting to limit liability in the area of litigation by the client and only allow options trades to "sophisticated" (yea right!) clients... easier to take money away from the "unsophisticated"...ciao, ed a.