Market Gems:Stocks w/Strong Earnings and High Tech. Rank Message Board

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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank

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To: Jenna who wrote (112032)	8/17/2000 8:45:03 PM
From: SMALL FRY	Read Replies (1) of 120523

Options opening later than general market... Options for earnings plays is not that easy. First you can't be getting options in slowing moving stocks with low option volume. You should look for at least 130 contracts that have already traded. Buying is easy, but selling options in a stock that is moving lower after a morning gap up or worse still is selling off at the open is a sobering experience. I've often found that when a stock opens at 9:30 at a high and begins to sell off, the options aren't even beginning to trade. Those precious 10 or 15 minutes can make a great difference in the trade. That's something that new options trader really need to know and understand... a major early morning gap of the underlying may not mean anything if the option MM is "waiting" for price stability before opening his quotations. Forcing the issue at that time by selling w/o a quote and selling at market is very painful... the MM will take you to the cleaners. I have won and lost many arguments and complaints with SEC interference on some, but that's the nature of the beast. The MM's contend they aren't liable for late fills on market orders since they "have" to wait for buyers of those options... which is of course BS for the most part. If they can make the spread and profit from it instantaneously, they don't seem to have that problem. I have always tried to trade more "liquid" options (AMAT's options trade better than some smaller net stocks). However, high flying stock's options are really tempting at times despite their steep prices. Very seldom do I get over 10 contracts; mostly I stay between 3 to 5... and I stay with ones that have large OI(open interests). Leaps and options had been the downfall of many successful stock traders... I almost lost my shirt two years ago on them. SF

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