To: Poet who wrote (61908 ) 1/13/2000 6:33:00 AM From: Jill Read Replies (1) | Respond to
I'll have to weigh in on this one too since we started an options thread on G&K core holdings. It may repeat a bit my post to RocketMan. My feeling is simply that in such a volatile market, where premiums are rich on the sell side during an oversold condition, and cheap on the buy side, it's worth it to add a portion of options plays. Mine are certainly greater than 2% of my portfolio. However, if one is buying or selling options only a few months out, they have to be hawkishly watched. Otherwise what Frank suggested is true--returns could vanish. If you think market sentiment is shifting, don't take the risk, take your profit and move on. I got out of my Jan and Feb near term QCOM calls yesterday--they were DIM calls, I sold the latter to finance exercising the former; the investments were quite profitable, but much less so than they were at the high point when QCOM was at 200. But nobody can time the market that exactly. If someone sat there and said, "I'm not selling these calls now because they're down 30% from their high, and I want to wait another week or month and see if they return," that is not smart. I'm happy with a good profit, especially if a correction is in the air.
