Hi Eric - No, I didn't see the PUT activity you mentioned. It appears as another indicator that someone is anticipating some 3Com action. I will take a closer look at the option activity.
I'm the first to admit that there is much I don't understand about the various PUT/CALL strategies. There is something basically negative, in my perception, about dealing with PUTS. However, your strategy of selling naked puts sounds interesting. If I understand it correctly, your are selling the right to someone to sell their stock to you "or put it to you" for the named strike price. In other words you would be willing to buy the stock, if you had to, and it would cost you the strike price less the premium you received for the puts. If this is correct, how much of 3Com stock are you willing to own? Although it seems like the chances of 3Com going to 17.5 are slim, it could happen.
My purchase today was the result of too much positive attitude which costs me dearly sometimes. But, maybe this time will be different and the stock will really take off. Sounds like the wishful thinking of a gambler rather than an investor, doesn't it? However, no matter how much due diligence I exercise, technical analysis, fundamental evaluations, news searches, etc., there is no guarantee that my assessment is correct. So, my investment is at best an educated guess with an optimistic outlook.
Your waiting another 10 days is probably a good idea. But, what will you do if the stock just happens to start a steady climb or maybe a pop in the next few days? Is your decision point for re-entry only lower than the current price?
Good luck,
Elmo |
