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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures

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To: Stoctrash who wrote (5667)	10/7/1998 11:38:00 AM
From: Tom Trader	Read Replies (1) of 44573

Fred--Arik can elaborate but I saw him post that 495 on the OEX would provide strong resistance and Don just posted that it tied in to the 7952 level on the DOW where he saw significant resistance. Re trading these markets--most systems have been whip-sawed. However, I have found writing naked OEX options to be an incredibly profitable strategy. Obviously it is not for everyone and needs to be closely monitored and one needs to be very disciplined. But the premiums are very rich and time seems to take care of eroding the premiums and if one gets the direction half-way right one has it made. For example, I sold the 500 calls at 7 1/4 yesterday in the am when the futures gapped up. I would lose if the OEX got up to over 507 1/4 which on the DOW would be the equivalent of > 8100. Now anything can happen but I was taking the view that it probably would not happen. I am also long the 510 calls--so my downside was limited -- though, I was looking at closing out the long calls on strength -- if the OEX had got to about the 495 level. I guess we need to be adaptable when the market environment changes.

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