Ask DrBob Message Board - Msg: 14422385

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Strategies & Market Trends : Ask DrBob

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To: jkl77™ who wrote (5647)	9/20/2000 9:32:39 PM
From: Louis V. Lambrecht	of 100058

John - yes euros know wegies. We usually use that kind of thing to get out of a bunker. QQQ options? Naz 100 should break 3837 to confirm upward move. Can go from there to 4180. Can also retest 3541. Corresponding values for QQQ: 88 1/2 - 96 - 104 1/2. If a buy a call Oct 96, ask 4 1/4, with QQQ at 100 value would be around 6 3/8, value at 104: 9 1/4. Stop loss at $3. If I sell a put Oct 94 at 4, with QQQ at 100 value would be 2 5/8, at 104: 1 1/16. Stop loss at $3. I could sell a put and almost buy a call for about $1/4: does not cost much. With a QQQ at 100, I could offset the position with a gain of 6 3/8 - 2 5/8 = 3 3/4. My losses if stopped (QQQ around 91-92 or NDX=3680) would be 2 1/4 + 1/4(paid)= 2 1/2. 3680 is very possible intraday: I only could play this via a direct access broker. If I reasonably can expect NDX to resist at 3541 (=QQQ 88 1/2), I could be better off selling Oct 86 puts at 1 1/2. If QQQ prints 100, I could offset the put with $3/16 less time decay. And as long as QQQ stays above 86(=NDX 3440) I can choose to keep the money. Discussion above foreducative purpose only. Trading options carries unlimited risk.

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