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Subject:  Re: Call options Date:  4/22/2006  11:51 PM
Author:  jrr7 Number:  1693 of 2244

1. Is the benefit of simple call or put options as described above simply the ability to control a large block of stock with less money? Is that it?

No. The benefit of options is the ability to transfer risk (either positive or negative) from someone who doesn't want to bear it, to someone who does.

If you don't need a huge payday from your stock, sell calls on it -- this will limit your upside.

If you don't want to consider the possibility of your stock dropping, buy puts on it -- this will limit your downside.
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