HI Claude; My feel for AOL is "not" strong that she will go on down,
I'm at a more of a toss up filp the coin thing right now. I play
her only on her extreams, I set a target ( it's not one I have a lot
of faith in that she will make it..it's a target "THAT IF" she makes
it then I'll pounce. If she don't I have learned to pass..set it
on the other end and insist on her getting to it before I move in.
This gives me some edge..as I often set the targets a little beyond
what I think she'l do..and she has more than surprised me more than
once..that's it kinda..being cautions enough to make her surprise
you a little, bidding on puts that o-well I won't likley get em at
that price..and letting them come to me instead of taking the bait
and chasing them. Now once I do get em then the fight is on.
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Your right I like to get in under..I'v lost enough to know to look
real good at as many things as I can , but also know I can't see
them all..one other trick I started doing was charting the options,
some of my picks are not based on what normal people would base
picking ..I see each strike price as a "pool" of Open Interest,
that "pool" is people..not just numbers the chart tells me something
about thoes people..I pick a lot of strike prices more by what the
chart tells me of the "people" in that "pool" ...and I want in under
most of them..particularly if out of the money..and I want a good
size pool if I can find it..because in that pool are prospective
customers when I go to sell..I know some of them will want to "average
down " if it moves my way. <G> It's sort of sneaky well not so sneaky
but I'm factoring in a little human nature ...oh and I can do a
rough guess at were they will want to or might be willing exit,
"as I know asbout what they paid " thanks to the chart, and I have
an advantage with a rough idea how much to under cutting the price
if need be. So it goes a little beyond what I think the stock will
go to or how much the call/put should be worth should be worth
that's a laugh to hell with that..what will the traffic
likey be willing to pay <G>
Some pools are lots better than other pools..based on the
amount of early arrivals still around and what they paid, this
gets handy just before ex date..when you can buy in cheap,
to one thats fixing to move your way, and a lot of mullets are
still hanging on sweating blood. Sort of cold way of looking at
it hu ? Yep right about ex date the market makers sweep her on
both sides of the strike price to shake out as many calls and
puts as they can shake...hell buy in late the one just on the
other side of the fence..you can almost bet they will run her
over there and try to knock out some puts or calls..AOL gets
wild at ex date just look back, and being in a good pool is
handy there. So much for that.
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Now my average down on optins is not so normal either..if I have
to I do but..then I'm ready excape on the next bobble..caused she
done fooled once..I'm right proud that even thogh I missed some time
back calling her top and bought in to soon ( at 54 ) I was able to
buy/sell puts all the way to her climb to 62...daytrading my rear
off knowing sooner or later if I kept her from biting me I'd be in
at the top..well she wore me down and only niped me once, while
I niped her three time as she was climbing..now that took a little
skill..at handeling surprises..that's it how do you handel an unpleasent surprise..and work the volitility.. double down and then
duck out..pick it up again on the next drop..but "keep some dry
powder" and if you don't duck out your powder might get all burned
up..so I'm only buying a half when I buy..and keeping a reserve..
and hell bent on staying within "budget"..
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Now with ADCT..I went in 10 @1..they asking 1-3/8 now..I got a
stronger feeling about her going on down than I had when I went in,
so if I take a second 10 even though I'm averageing up..I'm
doubling my bet ( same pool )..and I'm still in under the bid if
I do have to duck out. Come to think of it..even though it's not
been my style..I have done that before.
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All said and done I think each of us needs not so much find a
system some one else wrote..but a "style"..that fits our own
skill..and as, or if we improve on it do so in increments.
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I'm not playing AOL right now..just the Jan Puts..they stay all
or nothing..they are there for the big fall from grace that I know
is coming but will also likley arrive as a suprise..even to me
at the time. Now if buy some chance she don't crash by Jan..then
she will have taken back all I'v worked for so long and so hard
because I'v put just about all my profits out there.
But by golly if she does, I'l be able to take next year off.
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I know there was something important I wanted to say, but I done
rambled on so much I forgot what it was. <G>
Jim
O- yes your right 80% of people playing options lose money
the charts proved this out to me looking at them on ex date. |
