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Strategies & Market Trends : Canadian Options -- Ignore unavailable to you. Want to Upgrade?

To: Nevyn who wrote (1408)	7/6/1999 10:25:00 PM
From: Vectra	Read Replies (1) \| Respond to of 1598

There are many ways to use options for both speculative and long term investment strategies. Just what were you looking for? Any number of market sentiments can be met with the right strategy; bullish, bearish or even a neutral market stance. How about this one, you would like to own the stock, however believe it could ease in value over the next few months. Simple, sell a put in the hopes that you will be assigned, if the underlying meets or erodes below the strike price, it is likely you will be assigned, therefore you will get the stock at the strike price you choose plus you get the option premium to further reduce your cost to purchase the stock. However, (you knew this was coming - right) this strategy must be used with caution as there is a risk that the stock could continue to erode in value. Thereby reducing or eliminating your "profit" you derived from the options premium. This erosion could continue and impact the overall capital you used purchasing the stock when you are assigned. Conversely though, the price you are assigned at, could very well be the bottom you are looking for. Next question? ;) V