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.

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

To: steve mamus who wrote (80)	12/26/1999 11:22:00 PM
From: voop	Read Replies (1) \| Respond to of 8096

Hi Steve IMHO I would probably buy puts when I felt there existed the overwhelming probability of a large macro event from which there would exist no safe harbors. going back to my AOL example, it seems there is some significant seasonality to the e-commerce inuts and I think that after Jan earnings the stock is vulnerable...hell it isn't even doing well with the Santa Claus rally now as I perceive B@C regarding as passe and B2B is hot. Buying puts seems quite expensive to protect position long term Voop

To: steve mamus who wrote (80)	12/27/1999 8:50:00 AM
From: edamo	Read Replies (3) \| Respond to of 8096

steve...."puts" concur with your rationalization on the psychology of put selling. as far as put buying, the only validity i see is as a trade position in lieu of shorting an issue not in one's portfolio. buying a put to protect gains is as absurd as buying whole life insurance. you only collect if you die, and if you are "paid up", you just get your own money back. using a hypothetical case, you own a stock with a cost of 5, it is now selling at 100, you fear it going down, you buy a 100 strike put at 10....other then increasing your cost basis to 15, what have you accomplished? no different then the old short against the box, as you freeze your position profit wise. if you believe the stock will tumble, instead of taking money out of one's pocket, just set a stop loss...in this case equal to the prem you are willing to pay which would be at 90 (100-10). if it drops you are out...if it doesn't has not cost you a cent. better to sell short term otm covered calls as "protection" against downside.... cash in always better then cash out...seller of option in control has ability to reposition, buyer has limits... comments pro or con always appreciated....ed a. p.s.....congrats to "aunt jill" on her thread....just a thot(her word)