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

To: Jeffry K. Smith who wrote (117942)	4/15/1999 7:42:00 PM
From: edamo	Read Replies (1) \| Respond to of 176387

jeffry...<ot>..yes always, always have the capacity to accept the assignment..you know when you sell the put that your risk is no greater than going long the stock at a point in time less the premium expiry =date contract is fufilled, 3rd friday of month (rounding off numbers for simplicity) sold aol o1 200 premium=85 cost if put on expration jan 01 115(200-85) todays closing price 144 if stock above 115 in jan 01 you have profit, even if put and you sell the common immediately after assignment never have had stock assigned prior to expiration, regardless of price of common...no benefit to the options trader. i closed today some cpq puts that i held since 12/97..0040 with original 14 premium...was profitable until cpq problems discovered..closed today at 16.5...covered with aol for zero sum gain. covered 5 cpq contracts with every 1 aol sold. cpq tied up 160k capacity in margin account...some say loss of opportunity...but when cpq puts sold stock was at 28...used 56k proceeds from put sale bought 2000 cpq at 28...sold cpq at 43.5..for 22k profit in about 14 months...no money out of my pocket..14% approx return on the use of my margin capacity consisting of stocks as dell which more than doubled in same time frame. you must be comfortable in owning...but you don't own at the strike..you own at strike less premium, as stated which is always under current market.