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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (34680)	3/27/2001 9:05:17 AM
From: im a survivor	Read Replies (1) \| Respond to of 65232

<<BTW, if you like lower premium, look at the ITWO '03 $10 leap calls. >> In a bull market, I would be all over leaps. However, honestly, nobody knows how long this mess will continue...some say we recover by years end, others say we will lose at least 50% more, then take years to recover....frankly, me personally, I have no idea...I see good reasoning for both points....with this in mind, I am hesitant to buy leaps, unless they are OTM and very cheap. My reasoning is to trade the calls...not worry about the stock...with the volatility, OTM's really make some big up and down moves and are very cheap.....my concern in this market...paying $9.50 - $10 premium for a leap that expires in a year and a half, with the stock trading at $15 and maybe alot lower before this is all over. Granted, they are $5 ITM at present, but since we are in such a tough market...one that we just dont know when and how much it rebounds, I would just assume pay the $15 for itwo, then $10 for the 03 $10 leaps. If my crystal ball told me we were going up for sure, then the answer is easy...leaps all the way baby....but, lord knows I did not expect this crap to last this long, and who knows how much farther down we go, or when....sheez, I'd hate to spend $10 on those leaps only to find ourselves sitting here in a year with itwo at $7 or something......at least you can hold out with the stock......eventually it should recover if it is a sound business...we just dont know when. Personally, like I said, In a bull market...or if I knew we were near a bottom and would soon begin to rise, I would agree with you 100% and gain leverage with leaps....BUT, if this mess drags on calls and leaps on the long side are going to be the dagger in the heart to alot of people....if folks are betting the bottom is in and we have no more rough times ahead and are therfor going with calls/leaps over stock...and if they are wrong, a whole lot more money is going to get flushed. This market is so skitso, I would not sleep well at night loaded with leaps....so far the market has given me no reason to believe we are fixing to find a bottom and make a sustained upward move......anyway, good luck.....I see where your coming from and understand why you are doing it, but man, I'd hate to see this market stay in a funk and folks heavy in leaps and calls get burned.....I have some 03 sunw OTM leaps that I have been trading...good volatility. I also have some 03 aol $40 leaps and thats it....the $40's are barely ITM right now and going for I think 11ish....and honestly, I am concerned about them as well....I love aol, dont get me wrong...long term, aol is going to be a powerhouse, but in this crazy market, not knowing if aol is going to $20 or $60 by next year, I am getting weary holding the leaps.....every single day I ask myself If I should bail now and move the funds either into the stock, or another stock...the last thing I need after a year and a half like I have had in this market is to watch yet another set of leaps/calls disintegrate...but I still hold them for some reason....I hope I am not making another big mistake, but I guess I will hold for now and see what happens...maybe sell them into a rally....who know's...but I know they are causing me to question whether or not I should continue to hold simply due to the uncertainty with the markets.... Good luck Keith