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Strategies & Market Trends : Advanced Option Strategies

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To: Joe Waynick who wrote (61)	7/27/1998 7:32:00 PM
From: Markas	Read Replies (2) of 355

Hi Joe. Interesting strategy. I've been dabbling in options for the past 18 months, trying to learn as much as possible. I've looked at you ONSL strategy and am intrigued, but was wondering how you would find it superior to going long stock, selling the Dec25 or 30 calls, then stepping into a protective Sep20 or 22.5 long put position after a 2-4 pt run up and subsequently trading in and out of your put position for profit. I would find it hard to shell out $11 in option premium just to be able to trade a stock risk free after 3 successful trades. I believe you are assuming you make the full 4$ per trade(28.50-24.50). In my suggestion above, you would immediately put premium in your pocket, hedge your stock position to the tune of $3-4 per share, and if you are right about the $4 trading range, start making profit trading in and out of puts with a much higher percentage profit than trading the stock for a $4/share profit. Please understand that I'm not trying to be contentious or disparaging, just trying to understand the risk/reward or your strategy versus the one that first comes to my mind. Thanks in advance for any response.

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