Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Rambus (RMBS) - Eagle or Penguin -- Ignore unavailable to you. Want to Upgrade?

To: McNabb Brothers who wrote (38698)	3/22/2000 1:04:00 PM
From: jjs_ynot	Respond to of 93625

Hank, Congrats. on the nice play on the short RMBS calls. Regards, Dave

To: McNabb Brothers who wrote (38698)	3/22/2000 1:12:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 93625

My point was you could make 11 dollars a day daytrading. No need to wait for April expiration. I do not talk in public about my assets. I guess I'm shy. :)

To: McNabb Brothers who wrote (38698)	3/24/2000 11:40:00 AM
From: Ray Rueb	Read Replies (1) \| Respond to of 93625

I've been sitting on this response to selling naked calls since you posted this article and I have to say, "You're taking one hell of a risk". The characteristics of naked calls is "limited potential for return, unlimited potential for loss". Now, in practice, 99% of the time, you'll make money with this strategy. But... 1% of the time you're in trouble. I like to call this "lightening striking". It only takes once. Imagine writing naked puts on Microstrategy or P&G a month ago, or writing naked calls on RMBS two months ago, or just imagine the headlines: "Hitachi settles with RMBS... agrees to pay royalties... RMBS opens at 525, up $150..." Your options are trading at $100 and you pay gigabucks to get out of your position. Of course lightening will NEVER strike where you're standing. When I worked for a trading company in Chicago, I used to see this type of trader make a good living. But every now and then, we'd be carrying them out on their shields, and we'd never see them again. For lightening insurance, our rule was: NEVER risk more than 20% of your portfolio where lightening can strike. You be careful out there. Ray