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Technology Stocks : AOL Options for the Bearish

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To: White Shoes who wrote (3)2/28/1998 10:49:00 PM
From: The Duke   of 33
 
i have an account with ameritrade and they will let me do whatever i wnat with options, and their margin requirements are just a little bit above exchange mins. Probably the best broker to trade options with is Lafferty, but they are not online and their commisions are little higher. (actually about double) on the other hand they have great execution, and they know the difference between a straddle and a strangle.

On a more AOL note, If i were starting from scratch right now,I would probably buy an in the money put say maybe a jan 130, so you dont pay too much time premium, and then thing about occasionally selling out of the money puts for the current month. that way your upside loss is limited to about 23 points, your time erosion is very limited, potentially even profitable, and your downside potential is very good.

of course its also tempting to buy jan 2000 puts at say 60. these are only around three right now and if AOL is fairly priced in two years time they will be worth around 55. *smile*
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