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Non-Tech : Philip Morris - A Stock For Wealth Or Poverty (MO) -- Ignore unavailable to you. Want to Upgrade?

To: S. M. SAIFEE who wrote (3559)	4/3/1999 7:10:00 PM
From: Gary Korn	Respond to of 6439

What if the stock starts moving up toward 40 (with 5 % div. more likely to move to 40) then you are short the stock and if you stay short then you might end up paying dividend Selling naked puts doesn't make you short the stock. It just means that, if the stock falls below your strike price, it gets assigned to you and you become long the stock. Nice way to, potentially, purchase the stock cheaper than the going rate. It is true that, by selling puts, you would not receive dividend payments unless/until assignment. Look at 2001, strike 35 call..it is cheap and may you should sell June 45 calls and collect premium every three months or so. If the stock gets assigned, I agree I would sell calls. I tend to prefer closer in calls, because the total premium over a year is greater. On the other hand, your idea of a higher strike price will do more to assure you keep the stock and that it is not called away. As for the 2001 strike 35 call, I'm assuming your suggestion is to purchase the call? I generally hate paying premium out, and prefer to take it in. You could write 2001 puts for a bunch of premium, but I'd prefer to work in a near-term timeframe. Gary Korn