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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Earlie who wrote (57535)	4/27/1999 9:21:00 AM
From: edamo	Read Replies (1) \| Respond to of 132070

earlie...you're just the person that i would like to communicate with...for you said the "magic" words....puts/shorts i am an active put seller...i'm trying to gain insight into the mentality of the other side of the trade...my comments on put buyers, also apply to call buyers....for i fail to see how the last one holding the buy benefits... i've seen postings from those on this thread of put buying...but much like the call buyer, the timing is horrible...they rear their arrogant heads as a stock is falling... much akin to a terminally ill patient buying insurance on his death bed...one hell of a premium to be paid....should have done it when healthy...lower premium more insurance" instead of hypotheticals and esoterics i would like your comments on an actually trade i made...(dell split since, so all numbers split adjusted) 2/17/98 the wednesday after niles declares revenue shortfall on dell, stock drops from high forties to about 41....i see a tremendous swelling in put premiums due to what i consider a misperception in the applied volatilty...i sell 80 dell 0160 puts (zdeml) @ 26..net to cash 207965.06....we all know since 2/17 dell has "tanked" a few times to the mid thirties level.....but yet the premium never went for all intent and purposes above the 26 level... i realize that a put buyer can make money on a short term trade as can a call buyer...but who is left holding the bag on expiration..as long as the stock over 34 in jan01, i win...in fact if i invest my cash in a t-bill that adds about %10 to my winnings for the time period.....for the buyer to win the stock must trade below 34 less opportunity costs....i'm sure the "professional" will go thru hedging machinations with derivitives to limit both gain and loss...i have nary a care...why, i have the capacity to accept the assignment and if dell at 34 or above, i'm accepting below market stock...and if all else fails..i roll it out farther, get more premium and reduce my cost basis if ever assigned.... your comments appreciated.... good luck, ed a. p.s...japanese not as in nikkei<g>..but as in copying and refining a great management style....remember "theory z"?????