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Strategies & Market Trends : The New Millenium Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: HG who wrote (14)	1/15/2000 3:39:00 PM
From: John Pitera	Respond to of 540

Happy, I have worked with some of these strategies previously. I think that we will have our hands full for a while just getting all of our long-term candidates sorted out and in place as well as working with our short-term trading stocks. If time permits we may explore strategies such as you have outlined. One of our goals is to not make this portfolio management so complex and thin in parts as to scare away our client. Many clients don't want to be involved in options at least not in a large manner. We would also want to start with something very basic like covered call writing or disaster insurance and then be able to demonstrate to the client that we could bring added value with our option abilities, and more importantly.... we knew what we were doing with options -g- and had demonstrated it to the client. going back to your example, If we had sold a put on Ebay last June when it was at 150 down from 240 in APril and presumably at a low and also bought 100 shares of EBAY by the time it got down to 80 in august we would have lost 150-80= 70 a share on the stock and say another 3000 to 4000 on the one option (assuming that we got 40$ for it that would be a 3000 loss ) so we would really be pulling our hair out and I don't know how we would have traded out of it. even if we had written a call on the day that we bought the stock and you suggested waiting for a price rally to do that , it would not have bailed us out. It probably would have been better to buy the stock, assuming we felt it would go up and have a stop loss just below the 2 june lows in the 130 area. As time goes by we may revisit this issue. DO feel free to mention a specific straddle if you come across a particularly compelling one. John