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Strategies & Market Trends : Galapagos Islands

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To: habitrail who wrote (30462)3/4/2003 11:16:20 AM
From: Jorj X Mckie  Read Replies (2) of 57110
 
shorting
-theoretical unlimited move against you (unknown risk)
-one for one moves, no real leverage (good and bad)
-no time erosion on position
-tough to short when the stock is moving down (uptick rule)

long puts
-known downside potential
-leveraged position (good and bad)
-time erodes premium
-other things can erode premium
-Entire investment can go to zero
-Options are a tool of the devil and only a fool would play them on the long side.

I'm sure that other can add to the list

Disclosure, I own SPX and SOX puts<GGG>
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