re: << Like you, I buy regardless of the price and $ cost average, but I am betting short. This strategy works very well on either side (long or short) but ceases to be useful at a top. :) >>
LT,
Since you don't appreciate the options lesson #101, why don't we move to lesson #102.
"Do not just trade off fundamentals, because time is your enemy."
Even though the fundamentals of an underlying stock can not be ignored, it is still the least important factor among three option selection methods, which include fundamental analysis, technical analysis, and sentimental analysis. The major mistake a naive option trader often makes is to trade off fundamentals, because the time horizon just doesn't mix. If the underlying stock keeps going up or running in the sideway, he/she could just watch the option premium getting killed due to the time decay. This is also true for the LEAPS holders. Again, if you think DELL's fundamentals do not support its high valuation, which we don't share the same vision, why don't you wait for its breakdown before initiating any short position? You're a highly educated and knowledgeable individual. We hate to see your hard-earned money by practicing lawyer or CPA get suck up in the fast-moving train. We are on the train, and we don't want to leave without you, my friend. Remember, we are here to share opinions, so please be open-minded and don't just try to defend ourselves. |
