Options Message Board - Msg: 13613427

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Strategies & Market Trends : Options

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To: Poet who wrote (7663)	5/7/2000 12:43:00 PM
From: Tom K.	Read Replies (2) of 8096

...The following is the OIN strategy for trading SDLI, which may be of particular interest to Tom K.... Thanks, Poet. I don't subscribe to OIN so it is interesting to read his perspectives. Here's my positions with SDLI.... Short June 120 PUTs for 7.125 Short June 230 CALLs for 9.375 Total is 16.5 and my logic.... Stock is currently at 185. I have no idea which way the market is going, so I've allowed myself a 110 point spread on an excellent stock. If it drops below 120, I'll probably take it at a net of 103.5 (120-16.5). Could sell it immediately at a profit if it holds. On the other hand, if it starts heading upward (6 weeks to go 45 points or 24%), I'll try to pick it up around the 230 point for a net of 213.5 (230-16.5) and let it get called for the profit. If it stays at 185 for the next 6 weeks, I'll keep the 16.5 thank you. I'm primarily a PUT seller, however the way the market is currently acting, opening the short CALLs seemed like a reasonable move (if you buy my logic). The next 6 weeks will obviously be the test. Constructive comments are appreciated. Tom

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