Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 217.64

-1.2%

10:29 AM EST

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To: kdavy who wrote (54711)	10/27/2001 11:43:03 AM
From: Jacob Snyder	Read Replies (2) of 70976

ST trading: Interesting plan. My guess is, we need to spend a couple of months at least, in a bottoming range. If 40 is the top of that range, a stock as volatile as AMAT would have a bottom (of the temporary range) lower than 35. Maybe 30. The other possibility is that we punch through 40, and re-establish the 40-50 range. I'd give that lower odds. The options that will make the most money, to play that range, are at-the-money ST options bought when we are at the bottom of the range. Too risky for me, doing this right means guessing right on too many variables (variables that I am uncertain about, although I guess constantly). The above seems to be what you're doing with SUNW (buying at-the-money ST options), but with AMAT, you're using far-out-of-the-money longer-term options. Could you explain why the difference? Again, this is not a criticism, I'm just trying to understand your thought process.

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