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Strategies & Market Trends : Advanced Option Strategies

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To: Tom K. who wrote (132)	8/19/1998 1:16:00 AM
From: Don Martini	Read Replies (1) of 355

Hello, Tom K! My experience is that usually Dell will move far enough in the right direction in a few weeks to a few months to reduce the premium and maintenance requirement substantially. I don't wait till the leap puts expire, take most of the money then switch to larger premium options. Today I closed 30 contracts for an $8,400 profit because Dell dropped like a stone in the last hour. Then Michael announced 50 cents and a split; so if I had waited till Friday I could have made another $10,000+. Fortunately I still have 50+ long calls open, they should work. So most of my puts are closed; Tomorrow I'll sell 30-40 contracts at hi premiums, watch them drop as Dell climbs to 140 or so before 9/4 when it splits. Two days before split Dell will start to fall, so I'll close these then and sell some out of the money calls. About 5 weeks post split it will be down 15-20% from pre-split price, so I'll close the calls and sell some puts. It's like a rocking horse. I just checked my inbox and found your note; regret this late response. I hope this helps some, Tom. Please let me know if any of these ideas make you money. Sincerely, and best regards! Don Martini

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