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Non-Tech : Meet Gene, a NASDAQ Market Maker -- Ignore unavailable to you. Want to Upgrade?

To: KFE who wrote (548)	8/14/2000 12:29:54 AM
From: Mark Z	Read Replies (2) \| Respond to of 1426

Thanks, Ken, but Absolutely, sell the common. Protective puts are bought on a stock that you are bullish on but just want to limit your losses. I'm confused. If you're bullish, what losses are you limiting? It would seem if you're buying puts, you're not bullish at all but bearish. Unless you mean 'bullish long term but bearish short term' in which case I still don't understand how buying puts is advantageous over selling & rebuying the common in a retirement account. CSCO is a perfect example. Right after options expiration week last month, I felt CSCO was going to tank yet I remain very bullish on CSCO long term. I could've bought some slightly ITM puts for $4 that ultimately got up to $11 or just sold my common & rebought 8+ pts lower which is what I did. In the meantime I had the cash from the original CSCO sale to invest in 'defensive' stocks for the short term. If I had bought puts, I wouldn't have made as much on the CSCO side and I wouldn't have gotten the gains from the pops in the defensive stocks for lack of capital. BTW...this is a retirement acct...not an institution...not an account with tax events. I can understand institutions using options because selling out of, say, CSCO, short term with institutional size would not be easy & may clobber the stock. I don't have enough shares to worry about stuff like that <g>.