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Joe, Stock valuation is the key to my put and call close-outs. How
I proceed depends on what I think of a stock. For example, if I think
a stock has the potential to fall from 100 to 80, I may take off 1/3
when it hits 90, 1/3 when it hits 85, and a third when it hits 80. But,
if I think the stock will go from 95 to 6, like Micron, I am more
likely to roll down the entire position. For example, with MU, I
rolled all my 85s down to 75s and out in time, then rolled all my
75s down to 65s and out in time, etc. So, for me, the key is what the
stock is going to do. Some just have major upside or downside while
others don't. I am much more likely to cover my KO short sale in the
40s than wait for my long term goal of 35 on the stock, because I know
that KO is unlikely to surprise me and go to $10. Presstek, on the
other hand, could go belly up at any time and should be traded
differently. MB |
