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Strategies & Market Trends : Investing during a Bear Market

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To: raymond marcotte who wrote (77)11/10/1997 5:52:00 PM
From: Vol  Read Replies (1) of 226
 
nope, i'm not an experienced bear. I was only 5 when we had the last true bear market in 73-74 and I couldn't convince my broker to allow me to trade on margin at the time. -ggggg-

I am only considering shorting. BTW, I don't entirely understand your response. If I short a stock and sell covered puts, the following could happen:

1) Market goes down. My profit is limited b/c of the covered put I sold, but I make $$.

2) Market stays flat. I make money b/c of the premie I sold.

3) Market goes up. I am protected by the amount of premie I sold. If market goes up too much, I lose $$. this is the risk. I could then close out the position for a small loss or roll up the covered put.

Make any sense?

Vol
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