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Strategies & Market Trends : From the Trading Desk

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To: steve goldman who wrote (2630)	2/27/1998 9:21:00 AM
From: Steven Bowen	Read Replies (2) of 4969

<In my opinion, going long out of the money calls is a suckers bet. Its like playing roulette. You win once and they put a big pile of chips in front of you, only to give it back 1/4s at a time.> I don't agree. If you play carefull with a plan and do your homework, I can make money buying calls nearly 100% of the time. Just don't think you can pay an 1/8 and look to sell for 15. Know your stock, know it's trading pattern, know it's support and resistance, know it's important dates. And probably most important, play a stock in a well defined trend (hopefully up if you want to buy calls) or pattern. And then time you entries according to support and dates, and plan to get out after a small move. Buy options out 2 or 3 months, and be happy buying for 3 and selling for 4 1/2 in a week or so. Options get a bad name because people play them so recklessly (as you suggest in you post). Play them responsibly and you can make good money.

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