Re: [RT] Selling Uncovered Puts

["ira" <mr.ira@xxxxxxxxxxxxx>]

You can put in the order to buy the stock and sell 
the call for a net $16.33.  These types of orders are executed all the 
time.  Very few experienced traders will leg a spread if a spread is what 
they want to do.   One other thing.  What is your net after 
commissions.  Everyone's commission structure is different.  

<BLOCKQUOTE 
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
  ----- Original Message ----- 
  <DIV 
  style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From: 
  Gary Funck 
  
  To: <A title=realtraders@xxxxxxxxxxxxxxx 
  href="mailto:Realtraders@xxxxxxxxxxxx Com">Realtraders@xxxxxxxxxxxx Com 
  
  Sent: Monday, October 21, 2002 7:10 
  PM
  Subject: RE: [RT] Selling Uncovered 
  Puts
  
  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 target=_self 
        href="http://www.optionsnewsletter.com/page.cfm?id=145&page=customizer&ticker=TTWO";>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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