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Jim,
Well the other thing is that the advisors have been telling some clients
to sell the rallies. The Nightly Business Report or The News Hour with Jim
Lehr suggested a rally Tuesday morning, after the morning sell off. I can
see it but I don't see a carry through.
I have struggled with this from time to time on when does one take profits
in times like these - i.e., a wind fall profit. I think part of the
problem for me is not having a plan.
Here is the plan I am thinking of:
I did look at the AMAT chart and there is another long term support at 20
1/2. If for some reason AMAT gaps down and gets there early in the
morning, I'll close out my shorts on AMAT. That would mean that AMAT would
be down about 4 pts in the morning. Or way above it's average true range.
However on the other hand I can see AMAT in a bear market going to $10.
I think part of my problem still comes from having too small of an account
to be able to really diversify and not being able to leverage my money
with options. The other thing is when I make this kind of money in such a
short time I am not quite sure how to handle it. However I am better at it
now than what I use to be.
I know that some on this list have been making this kind of money every
week for a long time. I am sure it took you some time to get use to it as
well.
Harley
Jim Greening wrote:
> Harley,
> I don't see any support for another 400 Dow points. Having said
> that, watch for the rally tomorrow <G>.
>
> Jim
> -----Original Message-----
> From: Harley Meyer <meyer@xxxxxxxxxxx>
> To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> Cc: Alan Kwong <alankwong@xxxxxxxx>
> Date: Monday, August 31, 1998 4:01 PM
> Subject: Re: Weekly Pick
>
> >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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