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Technology Stocks : America On-Line: will it survive ...?
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To: Brent D. Beal who wrote (5931)11/13/1997 7:11:00 PM
From: mike smith  Read Replies (1) of 13594
 
If you think AOL will fall to the 40's sometime in the future, but your not sure when, then buy long term puts. If you think it will fall to the 40's in the short term, try short term puts.

Granted, you can make more with the short term puts, but keep in mind, the puts may expire worthless if you don't unload them in time, therefore you've increased your risk. If you give yourself more time, you may be compromising your potential profit in the short run, but you have also purchased a little safety (if you can ever call option playing safe).

When you give yourself more time, you do not get pressured by temporary bounces, you can hold on to your puts until you have realized your target price.

Good Luck to all...
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