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Strategies & Market Trends : Advanced Option Strategies

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To: OX who wrote (327)	3/27/2000 4:46:00 PM
From: David Lind	Read Replies (1) of 355

Ox, I've had no problems with downturns and my OTM puts, because typically it isn't too difficult to get a handle on why things are happening if the trade is carefully considered before entering. Maybe I've been lucky, but I've written 24 puts since Jan 1 and haven't lost one despite three corrections. But the gaps and sharp rallies UP are another story. Traders get ahold of a stock and drive it to the roof for no reason other than a momentum play. I was naked calls on two of those recently as part of a spread and a strangle, but I got very lucky and was able to flip to the long side to cover most of my losses before the stocks topped out. It is a position I will not get caught in again. Funny, but in three months of devoting all my time to this, I've found that while it is relatively easy to locate good option trades based on my experience as a position trader, it is extremely difficult to keep trading activity to a minimum. It takes much more discipline and patience than I had imagined. But I am learning. -David

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