Bill Wexler's Profits of DOOM Message Board

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Strategies & Market Trends : Bill Wexler's Profits of DOOM

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To: tom rusnak who wrote (1016)	6/11/1998 5:27:00 AM
From: Dale Baker	Read Replies (1) of 4634

If I may, puts have at least two advantages. The most you can lose is the premium. If ZONA were to go to $70 by August (hehehe) a straight short would be down $45 instead of the $10 you paid. Second, you can always buy a put. Shares of popular shorts - ZONA, ZITL, AMZN, PNDA - can be impossible to find at some brokers. Leverage depends on the complex calculation of expiry date and premiums. Black and Scholes won a Nobel prize figuring that one out. Most of us aren't as good, even when we use the Black-Scholes gizmo on E*Trade. FWIW, in general, the advice is to do what you did and buy in the money puts.

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