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To: SJS who wrote (4983)	1/23/2000 6:17:00 PM
From: cthruu	Respond to of 24042

You are correct about writing options in a strongly trending market. They are losing propositions and if you are correct, your upside is limited. On most occasions when I have written options, I have lost money. I believe covered calls are the worst option plays because they can get you both ways. If the underlying tanks, you have no chance to recover and if it takes off you lose the upside. My experience about buying calls and puts is different. I buy options on strongly trending stocks in pullback, in consolidation patterns or breakouts from these patterns. This simple strategy has been profitable for me in over 70% of my trades. On the other hand, buying "just because it is running" has been a losing trade more often than not. As for 90%, I asked you that question because that number has been thrown around all over the boards without any objective data to support it. I do not mind that number, especially if the IRS believes that <g>. Options plays should be done correctly, based upon technical analysis of the underlying and with proper money management. In this context you should have winners in over 70% and you should be very profitable. Substitute options for stocks and you magnify your profits. People also write options hoping they will expire worthless. In this case, one who wrote the option is a winner even though that option expired worthless - this may be one of that 90%. When I create a call or a put spread, I want both of them to expire worthless. That is my strategic move and I am adding two more to that 90%. For every winner there is a loser. Thus, on balance more than 50% of option players must lose money on those options, counting true losses and worthless expirations. However the smarter minority still comes out to be quite profitable. Just my opinion. Regards: GP