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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Math Junkie who wrote (44449)	3/23/2001 5:58:11 PM
From: Jacob Snyder	Respond to of 70976

ST trading: You may very well be right, and the 40-50 (or 35-55) trading range may still be intact. However, I was getting enough danger signals, that I wanted to step to the sidelines with minimal losses. I fully intend to re-initiate my short, but I want to step out of the way of any bear rally, which is likely to start abruptly, and could easily drive the SOX up 50% from it's 515 base. The time to re-short will be when that rally loses steam. Difficult to gauge when that happens. I'm thinking that, as an alternative to shorting, I buy at-the-money January 2002 puts, in increments. I sell the puts 1/3 at a time, when AMAT hits 45, 40, and 35. If I've sold some, then I buy them back on the next trip above 50. My thinking is that I expect AMAT to wander within a trading range for a while, and then (without warning) drop to 35 or below. I have no idea when that happens, it could be anytime from next week to September. Or, it could never happen, in which case I sell my puts for a loss when AMAT abruptly gaps up to 70 (very very small grin).