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 : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: Ahmad Sinno who wrote (7155)	4/15/1999 3:33:00 PM
From: Mark Peterson CPA	Read Replies (3) \| Respond to of 19700

Ahmad, once you write a covered call, the stock and the options are "linked" until you leg off the call by either buying it back or closing down the position. Haven't found a broker that would allow a stop loss on the stock that sold you out of the stock and left you uncovered on the call. Others may have had different experiences. The risk of writing naked calls? Let's say you thought CMGI was never going to get above 221 earlier today, and as a result, you sold 10 of the May 250's. Well, how do you feel four hours later when the stock was trading at 264? (besides being upsidedown). There are other risks, to be sure. Before you dance with the devil, read MacMillan's "Options as a Strategic Investment". And don't start trading options until you have a fairly grounded understanding of options pricing, the Black-Scholes model, and the application of different options strategies. It can be fun and profitable, but like anything else, if you don't fully understand the risks of what you are doing, you can get your ear bitten off in less time than it takes you to click your mouse. Hope this helps, Ahmad. Best regards and good investing, Mark A. Peterson