Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (70589)	11/15/1999 8:54:00 PM
From: Amir Shalit	Read Replies (1) \| Respond to of 132070

Mike, assuming REV doesn't open at zero, <g> If I want to buy the bond and short the common. Does it make sense to be long/short the same amount of money? All that assuming that I'm very bearish on the situation but more bearish on the common. Thanks, Amir

To: Knighty Tin who wrote (70589)	11/16/1999 10:59:00 AM
From: TRINDY	Read Replies (1) \| Respond to of 132070

Michael, I am just getting into options investing and think that there could be a big hit to the tech sector in the first part of next year. This has been referred to as the "nuclear winter" scenario. As a neophyte in this area of options trading, my problem is that I fail to see the potential for a "killing" if we are right about the nuclear winter. For example, I see Dell 40 puts trading for about $3.25 for Feb. To control 10,000 shares I would be risking $32,500 and if Dell takes a $10 hit in share price that is, of course, a $100,000 gain. That just doesn't seem like good risk/reward relative to $32,500 going up in smoke in February. Possibly this says more about my potential as an options player than it does about risk/reward. What kind of risk/reward profiles do you like to see before undertaking an options investment? Do you like to play in the money or far out? And, finally, has your opinion on the potential for nuclear winter changed any lately? Thanks in advance for your help.