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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: jjstingray who wrote (51159)4/14/2002 11:49:33 PM
From: ajtj99  Read Replies (1) of 99280
 
jj, I would not recommend options on a high delta stock like QLGC. It is extremely difficult to make money on them even if you get direction and timing right. Furthermore, extreme, out of the money options are cheap because they are speculative and very rarely pay off. There is a reason they seem to be "on sale."

When QLGC does break, if you want to make money you would probably do best to short it rather than get puts. If it does test the lows there is still plenty of downside. If you short it with a decent stop, you will mitigate your losses. If you have the will to hold it until its eventual pay-off on the short, you may profit handsomely.

Anyway, that's my take. Sometimes we have to pinch ourselves and keep our greed in check, as that's what the MM's play upon.
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