Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: James F. Hopkins who wrote (20675)	6/18/1998 4:00:00 PM
From: yard_man	Read Replies (1) of 94695

the problem is Jim. Such generalizations are worthless. Those who wrote puts (naked not short) on MU when it spiked to 95 or BLDPF @ 130 (one which tripled my money overnight) look like they must have been dumb to me. Unless one is short a stock that is doing an IOM or PRST writing put options is very dumb indeed. Perhaps you attitide is one of sour grapes. Writers and buyers can both be smart, but their risks can be very different at any given time. Writing covered calls fro instance is more conservative than jsut holding stock. Selling a put on a stock that has been creamed becuase you want it if it goes a little cheaper is safer than a limit order at the same price. On the other hand writing a naked call exposes you to theoretically unlimited risk. Option buyers limit their risk substantially over being short or holding a stock. To win at pure call buying or put buying one has to diversify and assume that the majority will not work out. Problem with the approach is it takes discipline to implement and few follow-through. the house does lose from time to time!

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