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Strategies & Market Trends : Tech Stock Options

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To: Naveen Kumar who wrote (58597)6/7/2000 9:12:00 AM
From: Alfred W. Post  Read Replies (2) of 58727
 
I have a neat system you might want to try, neat because it does not cost you any cash:
Look for a good stock that has advanced quite a bit. Chances are that the price for a PUT is quite high. (tje fear of loosing on the profit)Now look at the calls of the same stock. Ideally this should be a fraction of the Put. Now sell the put and with that money buy calls.
So you are not out any money. The only risk you run is, that if the bears are right and your stock slides past the strike, you might get stuck with it. But remember, I only recomand doing this with good companies and than chances are that you were lucky to get in on that stock, not at the lowest price but near the bottom and you end up smelling like roses. Ideally you are going to make out on bothe, the stocks you were given and the calls. I did this successfully with Jack Hernry, Lucent and in the not tech field with Pfizer. It did not or not yet work with Chlorox. Good luck
Fred
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