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Strategies & Market Trends : Rainier's Column -- Ignore unavailable to you. Want to Upgrade?

To: kjhwang who wrote (27)	3/21/2000 12:52:00 AM
From: HeyRainier	Read Replies (1) \| Respond to of 106

Hi TCI, You're absolutely right about the theoretical infinite return. I failed to mention, however, the nature of my intentions with the trade, which highlights the overall risk/reward tradeoff. In a private message to someone just recently, I wrote: "...As for me, I've still tended to be a pure-equity guy. The only option ventures I've stepped into are shorting puts for the bullish effect. My most fun/un-fun play was with QCOM, when I wrote puts while the stock traded at $122. It promptly ran up 20 points within a few hours, locking me out of any upside gain. I learned with that situation that I probably should have exposed myself to the pure equity, because had the underlying moved against me, I still would have likely covered the short put. Hence, my losses would have been comparable, but I locked myself out of any upside potential. I made money in any case, and I suppose that's the best kind of situation where you want to be learning things from the market. 95% of the time, I'd usually have to be the one paying to learn these things..." That's what I meant about my particular tradeoff. Given my exit strategy, my losses would have been comparable, but my returns would not have been. Rainier PS. Glad you could join us.

To: kjhwang who wrote (27)	4/14/2000 10:02:00 PM
From: HeyRainier	Read Replies (2) \| Respond to of 106

TCI, How do you stand on your short put positions? Given current market conditions, put premiums remain rich, and could get even richer if conditions worsen. Margin calls are accelerating, and to my advantage, I have experienced that liquidity requirement-driven prices have tended to be attractive points of entry for assets. Next week is options expiration week, and the rate of decay seems to be fastest at this point. Combine that with rich put premiums, margin calls, and extended conditions, and it would seem to be an attractive idea to start writing puts once the market clears its urge to purge. Just a personal observation, of course. Rainier