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I guess I have something to learn if we are in a bear market. Since I have been
shorting my normal reactions have been that there is usually a rally to look for
after a sharp down turn. But I guess that that was because the bias was up. I
almost covered amat on several occasions today but hung n there. The market will
be closing soon and after AMAT broke 25 I doubt that I will cover. In fact I
will look to add to my position in AMAT. I now have 200 shares. I will wait
until tomorrow to-do that. Maybe I can catch a rally back into the mid 25s.
Harley
Harley Meyer wrote:
> Hello Jim,
>
> I hope you wait on the puts. I would suspect that we could get a small rally
> this morning, but I also see that WCOM has fallen a bit too much of late and
> I can realistically see a rally if not today soon in WCOM. IF you are dying
> to jump in buy your puts but also by some out of the money calls as well.
>
> Harley
>
> John Manasco wrote:
>
> > Jim
> >
> > Suffer me for a moment since I'm new at this options stuff. If WCOM does
> > go to 38 in the next few weeks then yes the Dec 40 put will double, but
> > the Dec 47.50 will go from 4.250 bid to about 15 to 16 in the same time
> > frame. And since it has a delta near .45 it has a much better chance of
> > making money IMHO. Granted your exposure is less with an OTM put but
> > your chances of making money seem to be less also. That doesn't mean you
> > won't make a ton, just that it seems to me the probability is less.
> >
> > If you're really up for indigestion how about selling the Sep. 47.50
> > calls for the same premium you're buying the Dec 40 puts?
> >
> > John Manasco
> >
> > Jim Greening wrote:
> > >
> > > I don't intend to hold this position
> > > very long, but also don't want to lose a lot of time value each day so
> > > I compromised and looked at the December put options. Since I'm
> > > expecting a sharp drop to under 40, I decided on the Out of The Money
> > > (OTM) Dec 40 Put options ( LDQXH - Bid 1.375, asked 1.625). Going
> > > this far OTM gives me much greater leverage at increased risk.
> > > However, the amount at risk for 1000 shares is small compared to the
> > > amount at risk shorting the same number of shares and the reward for a
> > > large move is essentially the same. The problems come if we don't get
> > > the large move <G>.
> > >
> > > Jim
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