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Harley,
I sold my puts when they opened today at 3 1/2 for more than a
double in two days. Then I decided to cross my fingers and sit on
DELL, SMOD, and WLA which all closed below my mental stop yesterday.
They closed so far below that I was hoping for a least a dead cat
bounce today and we got it. They all moved up good today and may go
some more in the morning, but I think I'm going to close them out on
the open. That will actually leave me all cash. I can't even
remember the last time that happened <G>.
Anyway, my system says that the trend is down and I shouldn't be
long now so I'll stick with short positions until the trend changes.
If WCOM raises just a little more to around 46, I'll buy the puts
again but may take a little large position this time.
Jim
-----Original Message-----
From: Harley Meyer <meyer@xxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, August 31, 1998 10:39 PM
Subject: Re: Weekly Pick and AMAT
>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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