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Strategies & Market Trends : Canadian Options

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To: Porter Davis who wrote (769)	12/9/1997 2:34:00 PM
From: fellowfool	Read Replies (1) of 1598

I find your remarks re trading very enlightening. I realize from reading back several responses that you are a specialist and am trying very hard to understand what it is that you do. In particular, I am interested in trying to apply your knowledge of the markets to learning where I have gone wrong with ABX. Could you please explain why the trade re ABX was so weird and why you are so grateful. "desperate to buy back his ABX Jan 35 and 40 puts and sell Leap puts. So far he's rolled about 500; get your pens and papers out and try to figure his thinking on this--today he buys ABX Jan 37.4 puts for $15.10 and sells LBA(Jan 2000) 35 puts for $12.60. I'm still scratching my head over this one (but I'm very, VERY grateful). " I have a similar strategy (on a much smaller scale) and I would like to know if it is a really dumb move. I would like to buy back my ABX JAN32.5 puts (foolishly sold last July) by rolling out and writing LBA 30 or 25 puts. I realize that I will have a debit on this so I have been hesitating, waiting for a slight rally (foolishly) and hoping to buy back my puts at a lower price. There is still some time premium left so I'm hoping that I won't be assigned before this hoped for rallly.There is a lot of "hope" in here. Since gold has gone even lower today, I'm even considering selling more puts at the current higher price and waiting to buy back my Jan 32.5 later. I would appreciate your candid remarks. Also, some questions: -what is the "M" referring to as in ABX M35s and sold LBA M35s flat? -why is this "flat"? -are the numbers in brackets more significant in their relationship to each other than in absolute value? Thank-you in advance for your trouble. Naturally, my nom de plume refers to my feeling regarding my position re ABX (and some other gold stocks) rather than suggesting that the same attribute be applied to anyone else. I am also planning on receiving the McMillan book for Christmas.

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