Hi Claude; The August straddle will likely work, but I can't see a
great profit it. The specalist on the options have a big spread built
into AOL, it's more than just the bid/ask you see. The way the puts
/ calls premium diverage/converage goes right by most people as they
focas on one or the other, but they don't move in tandem in fact
I played this baby so much that 80% of the time I can look at the
options and tell you "before" a price reversal, the options lead
the price that much.
I think your a little on the naive side if you think the top short sellers are not triggering the falls, it only takes a hand full
with access to the "buy stop" data to know when to nudge her just
enough to pick them off, and then short right at that time,
as the price is on the up tick as the johny come lates get bought
in the #1s have the ideal situation to short to the ones picked off, it's simple as pie if you are looking at the positions.
Every broker I have ever got to know on a personal basis has confided in me his convition that the vast majority of stock prices
are manipulated..and yes that would be better way to say it, manipulated, is not the same as fixing, so if I used fixing that was
a might strong, it's very close but not the same. As for AOL being
awash in a vast sea of players no way. 80% is held by relativly
few holders, and 2/3rds of them are fund managers that are over
half zonked out on prozac. <G>
I looked at the straddle thingy some time ago, and the way the
puts/calls opened up, and then closed in respect to her direction
when she was moving is in effect a hidden spread, note if she
goes up, just before the up turn the calls will go up in price,
then as she actully starts up they advance slowly, while the puts
lose value at a faster rate than the calls gain, the revese is true
if she goes down, the calls will lose value faster than the puts
gain.."the bookes have the edge" to do a straddle on AOL you got
a double nut to cover, with commisions and all it's not as profitable
as you would think by just looking at the price swings.
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I don't short , and won't naked. But say I had bought calls earlyer
and could use them as cover the way I'v been into this stock and
the options I could tell 80% of the time by looking at the options
just when to short, alas I'm not in that position so my only play
has been trying to guess the tops and bottoms..these guesses have
often been way off..so I modified it some..like if I see puts
sellng at 1-3/4 and my guess is she is close to the top I bid
1..if I get them I get them..if I miss I smile and wait for the
next run. Anymore they have to come to me I won't chase them.
Any time I get a set it's a little surprise, and a well I'l be
damed they gave em to me..from that point on it's a fight..
sometimes I even have to double up and revise my guess and duck
out on the daily volitilty. In spite of her ups and downs they
don't leave a lot of profits hanging in the options the bookies
on this cookie are sharp.
Jim
PS you be careful they could push her to 70 real fast, not saying
they will, or counting on it but 70 is not out of the ball park,
good luck.
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