Sparkel; That strategy has some fancy name , I though for a while
I had invented it..<G> But came to find out it's been around for
years Mike Burke gave me the history on it after I mentioned it
to him. Mostly it's for big players that can trade cheap and get
a discount ( interest on their short money ). I just saw the
spread this time ( which was more luck than smarts )
Normaly I prefer to keep them simple put/calls but lately have
been looking at some straddles , ( with all the volatility they
can work )..were you buy both calls and puts, not caring which
way it goes just so long as it moves good <G>
You can lose one position but make enough on the other that you
don't care..but if she goes flat then you lose both ways.
It's like mostly good right before earnings on one that has
a history of jumping up or down at earnings time.
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All in all I favor buying calls, over puts and have done much
much better with calls. It's simple bottoms are easyer to call
than tops..the nature of the beast makes it so.
Just think of the premise " A stock can only go down 100% but it can more than double and many do." ...all things equal bottoms have
to be easer to call than tops. While you hear of people saying
don't catch a falling knife..well calling a top is the inverse
of that only worse
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If shorters spent half the time hunting for bottoms as they did
for tops they would soon see calling the bottoms is much easer,
and often pays off better too.
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As for the last time I bought puts on excit..it was mar 50s
on the 4th at 3-7/8 sold early on the 5th at 4-1/4 ..time before
that I would have to dig up..but neither one was like a big hit,
just a quick scalp..and I don't advise others to try it as you
got to be fast..and you will lose a ton of money before you
get as fast as I am..you see the real education is most
often expensive, and even after you get fairly good it takes
some time to get it back too, <G>
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I don't play near the optins what I use to and I play only
almost sure shots any more,
grabing the money and runing like hell. Seldom the position
is open over 3 days if that long. I pass up a lot of good looking
ones ..and that's the trick..it's got to be better than just
good looking. My last best call was some leaps on CPQ when
she hit 23-1/2 did right nice on them they were deep in the money
and in 6 days she was back up and hanging when
I sold them. They had gone from 9-5/8 to 11-1/2...I like to
have died though; because in my rush when I bought them Jan16s I did
not realize they were "split adjusted leaps" and each contract
was equal 2.5...when I looked at the bill and saw I was on margin
I didn't understand why as I don't go on margin so I called the
broker and found out I had bought x 2.5 times what I thougt I
had so taht was not to bright..well I had first planed to hold
thoes suckers for a while as I could see her making 30 or more easy
enoung by next Jan, as it was I could also see a chance she may
drop too and put me into a margin call prior to that ..
so I said sell , sell sell them suckers...no not half of them
sell em all..and I grabed over 8 grand profit and ran like hell.
Boght em on the 18th sold on the 25th if you don't count the
weekend I had em 4 working days. Almost bought some more Friday
but passed. Now I wish I had..she went up nice today.
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By and large I do better sitting out when I see a likely dip
in the market than I do trying to find some shorts, I use that
time to hunt and be ready to garb some good dippers..
it's been a buy the dip market..just find solid stocks you
have some faith in..and with calls you can limit your down side
risk, I may buy a put or two , but it's not really my bag.
Jim
PS
I do have one eye on the short side with this market so toppy,
but I will likely keep it simple if I jump and I'll go into
a no load "SHORT FUND" for a few days. But with all the cash
sitting in Money Markets I want some better signs than I now
see before I even do that.
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