Nothing sophisticated! If I see a $100 stock going down, how
many shares can I sell short with, let's say $10,000- not many.
If on the other hand, I see the market begin to valuate this
same stock (in this case AMZN) in a market like this, where
even stocks that are making money are tanking, I get MUCH MORE
LEVERAGE buying puts, even expensive puts. The same 10K now
gets me 40 puts of AMZN Sept. 85's if cost of put was 2.50.
Since my avg. cost was 6.50, my cost was actually $26,000, but
if I can get out tomorrow at $70 (puts worth approx. $25...
$15 in the money + $10 because they are volatile AMZN puts),
I'll have made 100,000 (74,000 profit). Now after I pay off
various debts, I'll have enough to re-buy SNRS at $4 1/4.
NOT HARD AT ALL IF THE MARKET COOPERATES<g>.....
If you are looking at calls, good ones are EGGS Dec. 7 1/2
for 1.50....hell, you get 40 for 6K and if stock goes to 15
by then, you're doing pretty well. Anyway, whatever works...
BTW, simple to say, but don't buy calls in this kind of market.
You can buy puts on almost any stock and make $$$. |
