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leemalone2k3

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leemalone2k3

Re: AAsBrother post# 92

Wednesday, 08/12/2009 4:57:45 AM

Wednesday, August 12, 2009 4:57:45 AM

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Hi AA

If you sell a naked put, you want the stock to close above the strike price. If you sell a naked call, you want the stock to close below the strike.

In either case you keep the premium. With the naked put, if it closes below 2.50, you will be "put" the stock which means you would have to buy it.

With the naked call, you would have to sell the stock at 2.50 and buy it at the prevailing cost if it closes above 2.50 on expiry.
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