RE: [RT] Selling Uncovered Puts

["Gary Funck" <gary@xxxxxxxxxxxx>]

Thanks John. Interesting site, 
<FONT 
face=Arial>http://www.optionsnewsletter.com
but just looking 
at one random recommendation:<FONT face=Arial 
color=#800080 size=3>Covered Call: 1 


<TABLE borderColor=#ffffcc cellSpacing=0 borderColorDark=#509ce1 cellPadding=2 
width=491 bgColor=#ffffcc borderColorLight=#ffffcc border=1>
  
  
    
      Name of the Company
    
      Take-two Interactive S
  
    
      Stock Symbol is
    
      <A 
      href="http://www.optionsnewsletter.com/page.cfm?id=145&page=customizer&ticker=TTWO"; 
      target=_self>TTWO
  
    
      Last Price of stock
    
      $27.63
  
    
      Call being sold is
    
      March 17.5
  
    
      Symbol for the call is
    
      UOCW
  
    
      Bid Price of the call
    
      $11.30
IN PLAIN ENGLISH 


  
  
    
      If you buy 100 shares of  Take-two Interactive S at the 
      price of Then sell 1 contract of the March 17.5 call 
      for  Your "New" cost on Take-two Interactive S would 
      be  
    
        $27.63  - 
      $11.30     $16.33  
    ( $2,763.00 )( $1,130.00 ) 
      ( $1,633.00 )
  
    
      On the third Friday in March if the stock is above 17.5 , Then it 
      will get taken ("Called") away from you at $17.50. In turn you would make 
      7% on your investment. 
       
      
      
      
       
      Above, that $17.50 option is a full $10 in the money. Consulting the 
      options quote:
      <A 
      href="http://quote.cboe.com/QuoteTable.asp?TICKER=ttwo&ALL=2";>http://quote.cboe.com/QuoteTable.asp?TICKER=ttwo&ALL=2
       
      There's zero open interest in that particular 
      option, and even though the bid shown is $11.30, I wonder how realistic 
      that quote will be if you actually try and execute the trade?
       
      When I look at this trade, can't help wondering if there isn't a 
      better way to earn 7% on my money? I also think that any service that 
      makes recommendations should filter out very thinly traded options, say, 
      restricting their choices to strikes that trade an average of 100 
      contracts/day.
       
       






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