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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: Steve Robinett who wrote (29677)	8/20/1999 3:30:00 PM
From: Moose	Respond to of 41369

Anyone know the synopsis of Cramer's article today? I'm not a subscriber, should I be? "Why Wall Street Is Dead Wrong About AOL" thestreet.com

To: Steve Robinett who wrote (29677)	8/20/1999 4:36:00 PM
From: Dr. Zax	Read Replies (1) \| Respond to of 41369

Steve: This painfully boring Maxpain conversation has been going on for several days, as it does once a month at expiration I still find it a little interesting as I only recently started seriously thinking about and working out options investing, and it does seem to pertain to AOL seeing what looks to be a very deliberate close at about $95 (even if that isn't the max-pain number... it looks options related). and, second,you're advocating a naked short straddle, IMO, the most dangerous options trade. Well, my statement did have an if in front of it. So, I will hold that if the if part is true... then this is just about the best strategy. I agree with you that the if part is not true and I hope that no-one takes my statement as a suggestion. as for the dangerous part: While I would not advocate playing options, in general the riskier the play the greater the chance for a big hit. This is true anywhere in the stock market. There is nothing wrong with getting into a naked short straddle so long as you know the risks. I have not gotten into the options trading enough yet to know names, but I imagine that a position writing both calls and puts on the max-pain point would be even more dangerous (and profitable with a hit). What would that be called? I assume you mean people playing options believe the Maxpain theory and buy or write options with that in mind, which is probably true. yea, I guess that wasn't very clear. What I meant is that if a large enough population are convinced that a stock will go to a certain price, it will go there. People won't buy above and people won't sell below. Today's AOL price action was a pretty clear example of the general public collectively deciding that the closing price was going to be about 95. Is this another conspiracy theory? Hardly! A conspiracy theory means many people are out to screw someone(s). This price action I talk about can be done by one person. The sudden after hours jump of 2 points at the end of last month is a good example. Not paranoia, or conspiracy, just the way it is and if I were in a place where I could make a couple thousand extra $$ by making a single afterhours trade.... I'd be there. Dr.Zax (sorry for length)