HI Bill; With the Foreign markets I just size up the mood,
by seeing how many are up/down and about how much, sometimes
it means nothing but sometimes it's real strong..if it is strong
will effect us, other wise I disreguard it.
---------------Puts/calls/shorts
Guess it would take a book to explain it correctly so
as it would be more clear, thing is with planing you can
stay short some stocks, and sell puts on them all at the same time,
but having calls to cover your rear has to be part of the plan.
You get a bonus on the down side with profit on short and put,
that bonus on the puts has to work out ( crunching the numbers ) to pay for your calls, so picking the options with the right spread becomes as much a trick as finding the stock to short.
----------
Also finding "were" the time premium gives you an edge (spread)
can be a lot of work, but once your in you got a "lock."
Getting a "lock" is not easy, but bookies know that's the way to
go. Finding a high shorted stock you generally find puts
selling high too..in respect to the calls.
also look for calls at a bargin ( time premium wise ) vs
Puts bringing a better rate ( time premium wise ) your really
buying & selling "time"
you get it cheaper if you buy more of it, and get more for it
percentage wise selling it in shorter chunks. Also the far out
calls don't move as fast with the stock price as the short ones
do, so if you need to roll the calls as the price of the stock
falls you don't get hit as hard out there..percentage wise as
the short is making you, like keep the calls/puts/shorts in balance.
in one respect it don't matter the stock goes up, you keep buying
back the cheaper puts and selling higher ones and can arb out with
the calls any time you want. Not all put sellers are dumb.
Some off dem makea biga money a little at a timea.
-----------------
I was running numbers for my "Uncle Joe" in Philly in the early
40ts, I was 5 years old ! and a biga bet wasa quater. The neighbors
give me the dimes and quaters in a piecea paper, and I take it to "Uncle Joe", ( often they give me a treat too )
for this I get a biga smile from Joe and get to serve the beer in the
celler to the poker and rummy players that comea by every weekend,
I knowed to serve just as a pot was win, and to give the winner
special service..( man did I maka da tips..more money at the time
than I could count..but I leared how count fast enough) wonder
if that had any thing to do wif my being so good in school in
arithmatic..I always creamed the class when it come to numbers..but
nothing else interested me..never could and still can't spell.
<G>
Jim |
