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Technology Stocks : Xylan
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To: jas cooper who wrote (2834)10/15/1998 11:20:00 AM
From: drdan  Read Replies (1) of 4135
 
james, if you want to buy puts, do so at a strike price at or above the stock's present price. That way, once the stock moves down, the option will gain in value considerably as the stock drops. If you wanted to be gutsy, you could buy puts with a strike price well above the stock price so that for each dollar drop in stock price the option would gain a dollar.....keep in mind, though,that you will get killed if the stock goes the other way. A less risky approach would be to buy puts somewhat below the stock's present price and then let the stock drift down into the money. You make less, but you won't get hammered as badly if the stock goes the other way. Hope this helps.

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