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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 14 4:00 PM EST

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To: Joan Osland Graffius who wrote (49503)	5/8/2000 8:29:00 AM
From: pater tenebrarum	Read Replies (2) of 99985

Joan, simple...i'm buying a bunch of far ootm index puts whenever it seems opportune (i.e. the market looks ST overbought). i basically write those off as soon as i buy them...they're very low probability bets, that have become not-quite-as-low probability bets ever since the tightening cycle began. now, when the market moves sharply lower as it did e.g. on the day of the CPI report, i sell enough of those far ootm puts to book a slight profit and still remain with enough contracts to participate in case things take a turn for the worse. another bet worth playing here imo are calls on the Euro. the far ootm calls are very cheap and the underlying contract is fairly large, so you get a lot of leverage. disclaimer : be aware that both types of bets should only be made with money one can afford to lose...for all i know it may take a while for them to bear fruit. regards, hb

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