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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE)
SIII 0.00010000.0%May 12 5:00 PM EST
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To: m. g. williams who wrote (12330)11/28/1998 11:34:00 PM
From: Don Earl  Read Replies (1) of 14577
 
Hi m.g.,

Dec. 5 puts might not be a bad bet, although the open interest in puts is pretty small. Might have a hard time getting orders to fill.

Personally, the market is starting to make me nervous again with current valuations. If the Dow starts pushing 10 grand, I'll be looking for some short plays. My guess is the tail end of January could get ugly. Especially if the fed decides to tighten to cool off the market. As volatile as SIII gets sometimes, January might be too far out to sell 5s. If you subscribe to the "maximum pain" theory, anything under $5 will leave the majority of January options worthless, since most of the open interest is in calls.

Selling puts is basically a long play. In general, I tend to use options as a hedge against a long position or a pure short play. Either buy puts or sell calls, which is basically a short bet that the stock won't go above a certain price in a certain period of time, or will pull back.

Regards,

Don

PS: As usual, my opinions are just that. Opinions. Any of my comments are provided for entertainment purposes only and are not intended as investment advise. Hopefully there are still a few other more experienced option traders lurking on the thread that can offer some contrasting editorial opinion.
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