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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe

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To: edamo who wrote (35)8/13/2001 1:20:38 PM
From: Uncle Frank  Read Replies (2) of 1064
 
>> if you have a penchant to sell puts, it oft times is best to be intimate with the underlying stock, and take advantage of any anomalies in the implied volatility caused by a specific or market news event that sends the share price rapidly down....

Wouldn't that approach be the equivalent of buying on dips, a strategy best suited to bull markets?

In markets like the one we've experienced for the last 18 months, where support levels have been been breached repeatedly, the risk/reward ratio in writing puts would seem to be unfavorable.

uf
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