Tidbits Message Board - Msg: 14101078

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To: Clappy who wrote (731)	7/25/2000 8:35:16 AM
From: edamo	Read Replies (1) of 1115

clappy....."favorite strategy" i'll quote pal...."keep it simple".... i prefer any position that gives cash in....therefore i stay primarily to the short put and call sales....this side of the transaction gives a true repair ability, which most times can give additional cash (which lowers cost basis) when the position is reset....i've been on the sidelines with 90% cash since prior to the downturn. i'm getting a bit more aggressive as the market appears to have stabilized a bit, with an ever so slight upward bias. at the moment i'm selling front month puts in the oversold chip sector...largest position is atml (total 150 contracts open)....longer term i have a fair exposure to qcom with 02200, no time value, same as going long....some contracts have been assigned, but i feel at these levels qcom is a bargain. try concentrating on issues that you know....become intimate with them, so you can react to "news"....particularly if you know the "news" may not be so correct....it is these "negative news times without basis" that cause the put premiums to inflate and the calls to shrink...this is the excess implied volatility that can actually normalize with downward movement of the stock and actually return a quick and substantial profit. this morning i just noticed atml bidding down on news of a patent infringement suit by stm microelectronics....this can cause a knee jerk reaction and offer a high implied volatility if the "news" causes a rush to the exits....the reverse may occur when atml responds publicly to the suit.... always risk....just try to limit it! good luck..ed a.

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