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To: taxman who wrote (710)	1/5/2000 11:59:00 PM
From: Jeffry K. Smith	Respond to of 8096

TM - yep, you're right about the risk if the stock tanks - depending on the term and strike though. That's why I am increasingly buying deeper in the money LT calls to protect myself against that eventuality. I am still learning in this area. As far as the long calls, my problem in the past has been putting to much into them, and not having good timing. I am somewhat frustrated because I don't have the "feel for it. I've been burned so many times I can't hardly bring myself to do it. On the long calls, the stocks I would like to play have such high premiums that I feel more comfortable playing the spreads or CC's. Any suggestions for how to get my mojo back - as if I ever had it? Regards, Jeff Smith

To: taxman who wrote (710)	1/6/2000 8:49:00 AM
From: edamo	Respond to of 8096

taxman...."limit your plays to what you can afford to lose" this statement in itself, coupled with your otm call buying strategy clearly points out the pure speculative and high risk nature of your strategy. as one said, "genius or bull market". if the stock tanks you will lose, so you are making an assumption of forward movement. if one sells puts in the same issue that you are buying otm calls in, then the same assumption is made, if you are correct so are they, which negates the risk, you always refer to. with the put seller, if the stock tanks, you do not lose, you actually gain, as you are buying a stock at a below current market price.... the important thing that one must conclude regardless of buy or sell side is their belief in the direction of the underlying....without this, all is pure speculation....the direction must be based on fundamentals and technicals... good luck..ed a.