<<are you saying to exercise the leap.>>
Yes, if your ultimate goal is to increase your holdings in the common down the road
<<if so, i still would have only gained on the leap. with my way i gain on two vehicals at the sametime and feel like i get the common for free since i bought them with the house's money! i'm sure this is a two edged sword and would work equally as bad in a down market. but again thats why i only consider options on gorillas!>>
Ahem.(tm)
Is this the same 100 who just lost many shirts on the consolidator stock? Now using both options and margin to double down and make up the losses? A few comments:
first, been there, done that. <ggg>
second, it's quite risky. Even gorillas may well tank substantially if there is a Naz correction, as so many think might happen over the next few months. The whole point of the Lynch-Buffett-Moore approach is to make oodles of money by investing in great companies and sticking with them, even through downturns. Carrying margin makes it very difficult to do that, and increases the likelihood of forced sales under the worst conditions (he says, trying to convince himself by parroting what several other more responsible people have been trying to drum into his head over the last several weeks). The last way to impress the spouse with your newfound investing prowess would be to get screwed if/when things turn sour during the year....
third, one of the great advantages of options (and especially LEAPS), as I see them, is that they allow you to obtain some serious upside leverage without exposing yourself to serious downside risk. I mean, if you buy some calls on your favorite gorillas with a small portion of your money, you can profit hugely if they rise but lose only that small portion if they tank. With such great vehicles for speculation available, why would you want to dally with the (apparently far less attractive) margin stuff?
yours in margin recovery,
bubbleboy@hypocrite.com |
