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Strategies & Market Trends : Ask DrBob

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To: Louis V. Lambrecht who wrote (2580)8/30/2000 4:18:10 PM
From: Jennifer O  Read Replies (1) of 100058
 
LVL: <font color=green> You are 100% right about options.

What I am trying to say is this: there are third type of markets:

1> Bull, max return through buy calls;
2> Trading Market, sell calls on upper trading bands, sell puts on lower trading bands;
3> Bear, max return through buy puts.

Selling puts are safe strategy in bull market, just not gonna to get the kind of returns you can get for buying calls.

Use SDLI as example, selling puts takes $130 to make $75. Return of 58%. Buying calls yeilds monster returns for a stock like SDLI. If you have brought sept 220 calls in june for $10 you would have got yourself a 15 bagger for 3 month. Check out the following charts:

financialweb.com
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