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

To: RocketMan who wrote (6479)	4/14/2000 8:00:00 PM
From: Jill	Respond to of 8096

That was really smart. I have to watch closely and may decide to go to all cash and then repair my open short put positions out to 01, taking a paper loss on puts to offset the cap gains on selling QCOM, generating the same income from 01, and sit on sidelines for a while. At first the thought of doing this completely freaked me as I had no plans for this at all and thought I was safely buffered, but now I'm calmer about it. Cash generates 100% margin and keeps me from further downside, and when a true bottom is here and the market is consistently starting to recover then I get back in. I'll keep my KEOGH intact with my leap positions, even though it's probably shaved in half at the moment. But I don't really see the reason to sell there as they are 02s and pretty good strikes. So I'll just let that ride itself out. Some 'gossip' I've heard: a lawyer for many of the major brokerage firms has been getting calls from them all recently saying, go after these customers (in margin calls). So I'm tending to agree w/ Cosmo that it's not over Monday. I agree about May--that could be dangerous and I tend to think until recession hits the economy (not the stock market) greenie will raise rates. BP over on G&K has some posts on this and I agree: he overdoes it in both directions because he doesn't wait for the economy to catch up. It takes a while. Also here's the Thompson I Watch market recap: * After a series of stabs earlier this week, the bulls got slaughtered today, leaving Wall Street a veritable bloodbath. The NASDAQ Composite, DJIA, and S&P 500 all suffered their worst point-losses to date. Several factors that have been present in the market for some time culminated in today's carnage. This morning's harsh CPI report, offering evidence of inflationary pressures in consumer prices, set off the annihilation as investors' feared the Federal Reserve would aggressively raise rates-perhaps starting with a 50-point basis hike at the next FOMC meeting. Valuations became increasingly important as traders began asking what are you doing now- not what do you hope to do in the future. Maintenance margin calls, present in the recent sell-offs, added further pressure. Add to this a few less-bullish comments from heavy-hitting market strategists and you've got some serious pounding. Basically, the market was ready for a correction- and correct it has. (Maybe it's needed, but it sure doesn't feel too healthy to me). * During the last few hours of trading, there was a notable lack of buy interest, allowing equities to plunge deeper into the red. Market watchers talked about the compelling valuation but no one was willing to jump into the ring. Trading volume was extremely active, adding levity to the sell-off. So, is this the bottom? Some strategists are looking for the buyers to form later next week. However, many strategists believe there is a little bit of room to slip lower on Monday's session. For the week, the NASDAQ Composite tanked 1,126.4 or 34%, the DJIA sank 804 points or 7%, and the S&P 500 tumbled 160 points, or 12%.

To: RocketMan who wrote (6479)	4/14/2000 8:24:00 PM
From: jjetstream	Read Replies (2) \| Respond to of 8096

Very nice RM, one day I too will have a firm, grasp on those strategies....right now one year in I feel pretty fancy just writing covered calls for the first time.....

To: RocketMan who wrote (6479)	4/15/2000 1:12:00 PM
From: waverider	Read Replies (2) \| Respond to of 8096

I have a question: If I sell some of my deep in the money QCOM 2001 Leaps ($50) for a profit then sell the 2002's ($150) I recently bought at a loss I will not have a tax liability. Then redeploy the money back into different 2002's Q LEAPS ($155). This exchange will increase my leverage by obtaining more LEAPs than I originally sold (cheaper $155's and no premium left in the $50's) and allow me to take advantage of a loss that otherwise would just evaporate (assuming QCOM goes back up of course). Am I missing something here? The IRS publications state: A wash sale occurs when you sell or trade stock or securities at a loss and within 30 days before or after the sale you: 1. Buy substantially identical stock or securities, 2. Acquire substantially identical stock or securities in a fully taxable trade, or 3. Acquire a contract or option to buy substantially identical stock or securities. #3 seems to answer my question in that by trading one call on the same stock for another seems to be substantially identical. Anyone have an opinion on this? Thanks, Rick <H>