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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (19810)	9/2/1998 7:15:00 AM
From: IQBAL LATIF	Read Replies (1) of 50167

Leverage the only way to go about in the markets- for small investors. Suppose you are looking at a 20% drop in present prices whereas Abby thinks we go back to where we were, now you need to play a game that you are in the market but if the drop comes take the stocks at much lower level-- A small investor with 50,000 $ may look at this strategy-- Instead of buying the stocks now-- He sell 20% out of the money puts like say COMs 20 puts for March-99 and buy 30 calls for March 99-- now if he sells 10 puts he will be required to buy COMs at 20 -- that is investment of 20,000 $-- from fifty he can allocate all his fifty in any of the stocks which he thinks will do well-- like SEG HTCH QNTM to name few or even CA EFII or TSEMF-- Once you are locked in if market moves up-- you will make money on the puts as well calls as put premiums disappear and call premiums multiply- now what is the risk here-- If market crashes you would need to buy or take delivery of the stock the puts you have sold-- I would think like I thought yesterday COMs at 20 or TXN at 39 is a bargain-- you are in the play but at 20% lower.. Good if Abby is right and I think she is right ( People have been short since Oct- I think it is like may be up may be down and may be nowhere kind of people) Abby makes a far better case than anyone else on markets, forget about voodoo perpetual shorts, you will be in the market from lows and still enjoy.. Now to top it off you may see we are at 250 on SOX or 125 on DDX as we get in the earning season, what happens next we go and buy one SOX put to protect our profits, or even if you are afraid to place the position you can buy a put covering 33,000 $ worth of stocks and hesge your downside in case of a crakck below 950 on SPY-- it is not about rambling levels it is about converting these thoughts into $'s this is one of my favorite strategy for people like my friends who want to risk very little- I tell them go ahead and play-- play you should when markets are screaming buys-- I read today that WSJ reporter was informed of a hedge fund who refused to take in funds due to lack of opportunities asking for some money for very exciting oportunities..Hedge Funds are very weary of size they are careful not to take money as results are dependent on funds employed, I will like to think that these combinations are bread and butter stuff for a professional investor if you are spending time to research spend some time to leverage, that is the way to grow your assets.. IKe

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