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: RoseCampion who wrote (651)	1/4/2000 6:11:00 PM
From: Wyätt Gwyön	Respond to of 8096

Rose tellin' it like it is! Nice post, very clear elucidation of advantages of hedged strategy. Points to the fact that you can do well without asking your stock to work so hard. Hit singles and doubles and increase your likelihood of a long and prosperous career. Swing for the fences all the time and you could wind up back in the minor leagues. Or, um, being a bench warmer in the majors is better than batting cleanup in double A. Mucho, Future Benchboy

To: RoseCampion who wrote (651)	1/4/2000 6:33:00 PM
From: taxman	Respond to of 8096

couldn't be any clearer. thanks. i know there are all sorts of tradeoffs but the problem i have with the spread in your example is that there is a cap at 105%. long call has unlimited upside. that's why i use it. regards

To: RoseCampion who wrote (651)	1/4/2000 6:42:00 PM
From: cthruu	Respond to of 8096

Hi Rose: This is a nice explanation of spread vs. call. Here is my two cent's worth: All strategies have their places and advantages. In sideways market, one may want to write covered calls. In slow trending market one may prefer spreads and in strongly trending market simple call/put buying will be more attractive. Writing options and creating spreads have limited profit potential. Because of this reason I prefer simply buying calls/puts. If the premiums are expensive, synthetic strategies work quite well. Often those expensive premium options end up being the most profitable when traded for a very short time. For example, if I put in a bull put spread, I often supplement with ATM call. This strategy, when placed with minimum debit or often with credit, has limited risk and unlimited profit potential. The calls are simply followed with trailing stops and the spreads expire or are rolled up. Reverse is true in bear markets: a bear call spread and buying puts. Of course, there are three commissions involved. I have not been able to project future profits on my option plays: only the risk. Regards: Girish Patel