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To: McNabb Brothers who wrote (38862)	3/24/2000 1:31:00 PM
From: Richard Habib	Respond to of 93625

Hello Hank, I'm one of those who take the other side and buy options. I've been very successful for 5 years or so. Every form of investments have their successful and unsuccessful traders. My returns are fairly consistently triple digit. But your right in that buying options requires work, and a marked propensity for unemotional trading. I use options within 10% of the strike, usually quite far out expirations - in order to generate leverages of between 2-4X. I look for situations where I can generate a reasonably likely scenario for both time and price on the underlying stock. I handle the time variable by looking for events that could reasonably catalyze the stock within a suitable time frame given the decreasing time value. If at any time I feel my scenario is no longer reasonable, I sell. I look for situations where I have a strong reward/risk profile based on a reasonable scenario, often 3:1. I'm quick to take profits if technical indicators make me believe the advance/decline momentum is faltering. Thus while I get my shares of 3-4 baggers, typically I make 80-120% on my investments. I take moderate 5 digit, low 6 digit $ positions while keeping most of my account in cash for flexibility and increased risk tolerance (This also keeps most of the emotion out of my trading). Just thought I'd let you know that buying options can be rewarding for those willing to be very disciplined in their trading. Rich

To: McNabb Brothers who wrote (38862)	3/24/2000 2:16:00 PM
From: pompsander	Respond to of 93625

Hank: I found your message on your option trading strategy very interesting and informative. I have sold puts over the years on some big, safe stocks like CSCO and EMC. Never big bets and I have always just pocketed the premium. I enjoyed reading about how a "big kid" does it. Pomp

To: McNabb Brothers who wrote (38862)	3/24/2000 11:27:00 PM
From: Ray Rueb	Read Replies (1) \| Respond to of 93625

Hank, You're obviously an adult taking informed risks My concern, really, was not for you. I was pointing out to the less experienced that there are inherent risks in the strategy you are employing. I'd hate to think someone who reads your enthusiasm for the naked calls, and then chooses to take a position by option writing and isn't aware of the subtleties of the margin requirements and the obligations. This is a public forum, frequently read by novices. Many of these novices have been successful over the last several years and have NEVER experienced a true bear market. I met someone yesterday whose EXPECTATION was that EVERY position in high tech would DOUBLE every quarter. I overheard one of our outbound call reps convincing/berating/pressuring his grandparents to buy high tech stocks because "they couldn't lose". Anyway, my point wasn't that YOU don't know what you're doing, my point was that your post is being read by OTHER people who are less experienced. Writing naked calls and naked puts is like skydiving. Most of the time, things go as planned and your main chute opens. Once in a great while you need your reserve chute. Even rarer, you must cut-away to save yourself. Even truly experienced professionals die while skydiving. Usually, its the inexperienced who bites the bullet, and gets caught in situations that a pro either avoids, is well prepared for, or gets out of. Hank, I enjoy reading your exploits and I certainly don't want you to stop posting. How about including a warning or disclaimer in the future (as the good netizen you are). Thanks. I still want you to be careful out there, Ray