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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: chaz who wrote (10215)	11/12/1999 10:26:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

>> After all, we are in for a pullback.... Yeah, Chaz, but we were in for a pullback after earnings, too. That was about 150 points ago. Is any one of us capable of predicting the movement of this young Gorilla? Surely not moi. uf

To: chaz who wrote (10215)	11/13/1999 8:44:00 AM
From: John Walliker	Read Replies (1) \| Respond to of 54805

chaz, I don't think stop loss order are very useful for options unless they are highly liquid. The price can drop a long way before a trade occurs which then triggers the process. If a limit is also set - a bit lower than the trigger point the options can very easily sweep straight past that limit. There is another way. I have some 170 and 200 LEAPS which are so in the money that their time value is now negligible. If I sell them and buy instead the same number of calls which are still in the money but not by such a large margin, the time value cost will still be fairly low but I will have the difference in strike prices as cash which cannot then be lost. If the stock price rises, I still benefit although I have lost a little in doing the transaction, mostly because I have bought some extra time value in the new options. If the stock price falls moderately, the time value will increase as the stock price approaches the strike price, cushioning the fall. If the stock price falls dramatically the options will become nearly worthless but I will still have the cash. Hope that makes sense. John