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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: London Brian who wrote (6387)	4/12/2000 11:48:00 PM
From: Seldom_Blue	Respond to of 8096

My 2 cents regarding puts: Check to see if you want to own the stock. If you do, then do nothing, or roll it out to May. You are counting on the stock eventually rebounding. If you do not want to own the stock, or think the stock has further to fall (you are timing the market on this one), then close the position and wait. I had April SEBL 110, SNDK 100, JDSU 120, and RMBS 300 puts at the beginning of this two week downturn. All in the money, of course. I plan to hold until the first three are assigned. RMBS I closed out when the stock was at 235 because I really did not like the look of it anymore. I am glad I did, because the stock is now at 193. I could have closed out the others, but I decided to hold. Hindsight is 20/20 of course. Seldom Blue

To: London Brian who wrote (6387)	4/13/2000 3:24:00 AM
From: Jill	Respond to of 8096

Hi...my JDSU puts are June, so I won't repair. They're 100 and 110. My worry is CNXT April so I'll have to think about it. It's not a bad company to own at 64/65. I would probably go to Sept or even leaps for repairing JDSU. You'll want to pick a strike that completely covers and even makes up for your loss--and that would help determine how far out to go. If you post a few choices, we can comment on them if you'd like. Just make sure you have enuf $ to buy them back before you sell a different strike/month, so you're being smart to consider it now. Attitude has changed toward b2b, and I'm not sure how CMGI will fare. You can also consider buying back CMGI puts and writing some puts on another company you are more secure about.

To: London Brian who wrote (6387)	4/13/2000 9:50:00 AM
From: PAL	Respond to of 8096

You still have 6 trading days to decide. Nobody knows the bottom. When in doubt, take action on half of your position, then decide again tomorrow, and the next day etc. If you don't want to be assigned, consider the Minimax strategy (yes you do have to do some work calculating the alternatives) that I posted to Poet/Jill. Good Luck Paul

To: London Brian who wrote (6387)	4/13/2000 11:27:00 AM
From: edamo	Read Replies (2) \| Respond to of 8096

london brian....put repair... i personally would go out to january, and get the lowest strike that matches your current higher strike premium... object is to reduce assignable liability and gain time until the market reverses... i went from 30 to 70 to 100% cash prior to the down turn, taking profits in my long portfolio, and selling jan puts around the strikes that i sold the common...many are upside down, but the worst case scenario is i get my portfolio back at a reduced cost, earn interest on cash, and no margin worries, and if the stocks go up, and i miss the upside of the common, i make about 40% for the balance of the year, or reposition by closing and reopening positions....even though the put premiums go against you, they are not 1 to 1 with the common....an unusual, but effective hedge...