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Biotech / Medical : Isolyser (OREX)- Any comments
OREX 0.223-34.4%Apr 3 5:00 PM EST
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To: W. Kent Ward who wrote (242)1/29/1997 11:16:00 AM
From: Eric Hovdesven   of 617
 
Miles, thanks your analysis of writing the OREX covered calls makes sense and I appreciate the warning to those who may not have the time, ability or understanding to write covered calls. I like many tend to lack the time or discipline do options. Unfortunately I have seen to many investors lose money in options because there full service broker was executing the strategy. If one fully understands the movements of the underlying position it is a great strategy. Many times the account executive is picking a story stock and then ends up putting clients into larger positions in order to write covered calls. For the client its a situation of a little bit of knowledge can be dangerous. A good idea ends up being misapplied. I often think that the common investor should just be in mutual funds but then I still believe most brokers are intelligent and can provide individual analysis to a client's needs not available elsewhere, not to mention that without individual investors capital formation in America would be negatively impacted.

15%-20% stop/loss is a good idea, also in the CANSLIM, ironic on OREX because it would not meet CANSLIM's criteria. But as long as someone does not consistently hold on to losers while selling winners an exception is allowable. Amazing how many times I have seen active accounts that have suffered huge losses because losers were held and winners promptly sold on 10%-15% appreciation.

Well here's to "wishing" for a Slocum's event sometime this year.
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