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Strategies & Market Trends : Successful Short-Term Trading Strategies for Beginners

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To: William W. Dwyer, Jr. who wrote ()	8/9/1998 11:06:00 AM
From: DoggieDude	Read Replies (1) of 78

The recent downturn has provided us with some interesting opportunities for picking up some over sold stocks. Of course over sold is really a relative term since more market nervousness could make things worse. However, for those of you who firmly belive that this is just another great "buy on the dip" time then let me make a few suggestions. Find some stocks that got hit real hard during this past couple of weeks. I'm sure all of you out there have some of your own favorite stocks in mind. When you find ones that you like and are certain that the market just way over reacted by LONG TERM options or Leaps at the strike price or just under the strike price where they were before this recent mess. For me, I've picked Bristol Myers (BMY) call options for March. If you take a look at the chart & research the company you'll see that they have an excellent chance of recovering most of this recent down turn within the next month or so. Hopefully I will be able to sell them by late September at an excellent profit. A few points about options: 1) They are EXTREMELY risky and are not for everyone. They should be done only with RISK capital (anotherwords don't bet the farm on them). 2) Don't underestimate the value of time. By long out and sell as quickly as possible. 3) Don't be overly greedy. One excellent way to play options, is to buy several contracts in even amounts. If you get a good run up and the options are at or near 100% profit, sell half of them. Then you can keep the other half for free and see how much further they are going to go. 4) If they lose 15-20% of they're value BAIL out!!! Don't let a little loss turn into a complete loss! As for how this strategy has done for me. Well lets just say last year's spring dip did wonders for me. :-)

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