Stock Attack II - A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack II - A Complete Analysis

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To: Teri Garner who wrote (27823)	1/17/2002 6:11:43 AM
From: Steve Lee	Read Replies (1) of 52237

That Zeal article is BS IMO. Did you understand it? If so, can you explain to me why a high notional value of derivatives should lead to a conclusion of high risk? I have seen this article linked to on SI many times. Each time I have asked why the notional value is a problem and I have never received an explanation. Thay are just bandying around large irrelevant numbers as a scare tactic to support their short position, in my opinion. QQQ is at $38.78 QQQ Jan 41 calls can be had for $0.05 I can buy 200 contracts for $1000 The notional value is 200 x 100 x $38.78 = $775,600 But that figure is not indicative of risk cos my maximum loss is $1000 JPM might be holding some considerable derivative risk. But to find out, we would have to know specifically what those derivatives are. Zeal does not present that information. I wonder why not. From the way the article is written, I suspect that they are expert enough in the subject matter to know that their arguments do not add up. It doesn't look like an honest mistake to me.

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