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Guy
Are you going to write options only on indexes or also on stocks? My broker
requires $100,000.00 and lots of history to write naked index options.
John Manasco
----- Original Message -----
From: Guy Tann <grt@xxxxxxxxxxxx>
To: Metastock User Group <metastock-list@xxxxxxxxxxxxx>
Sent: Monday, June 19, 2000 2:49 PM
Subject: Selecting options or writing uncovered options
> List,
>
> Well, here I come again from our normal position of ignorance.
>
> We're planning on getting more involved with options. For our next sell
> signal that could arrive any day now, we plan on writing SPX Calls and OEX
> Calls in addition to buying SPX and OEX Puts. We have very little
> experience buying options and have had beginners luck with our first 5
> trades. Now we're going to get a little serious here and try to make a
few
> bucks.
>
> We've each budgeted $10,000 for buying options and another $10,000 as our
> exposure writing options.
>
> Now, I'm busy reading my option book, like a good little student. Since
we
> lucked out with our previous trades we're feeling overconfident. :) I do
> have a question regarding buying options (since I haven't gotten to that
> chapter yet):
>
> How should I select what option to buy? Currently I select 'in the money'
> options and look for option months that have a pretty large open interest.
> Is there a formula or a decision process we can apply to pick the right
> option month?
>
> In terms of writing uncovered options, my question is basically the same.
> How do we determine which options to write? I guess, even more important
> is, do we write options that expire out 3 months or would we write the
near
> month options? Again, since we're short term traders and will probably be
> buying these back before they expire, my guess is that we should write the
> near month.
>
> Additionally. my idea is that we should write 'in the money' options with
> pretty good open interest. Again, I'm sure there is a methodology
somewhere
> that would help us make a semi-intelligent decision.
>
> Any recommendations or thoughts would be appreciated.
>
> Thanks,
>
> Guy
>
> Paranoia...you only have to be right once to make it all worthwhile!
>
>
>
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