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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Jan Crawley who wrote (4462)	3/29/2001 10:28:40 AM
From: dennis michael patterson	Read Replies (1) \| Respond to of 52237

Now I feel safe. Thanks. And by "untouchable", do you mean you won't sell at all? LT buy and hold?

To: Jan Crawley who wrote (4462)	3/29/2001 11:46:04 AM
From: sirinam	Read Replies (1) \| Respond to of 52237

Jan I use another strategy on CSCO building positions by selling uncovered puts for Jan 2002., averaging down on the way. I select real battered stocks or lowest PE stocks to get a chance of cashing free money on lower strikes but being exercised on upper strikes. Example: Recent transaction on Csco Strike 20 I sold @ 4.25 8 days ago. If exercised my net cost become 15.75. Strike 15 I sold at 3.125 this morning. If exercised my cost will become 11.875. My bet is by Jan 2002 i might have been exercised on upper strikes, but the rest will be free money to average down my cost. Good chances the market has recovered a bit by Jan2002. Supposed i get exercised on the 20 strike by then,but not on the 15 strike, my cost will be 20 less 4.25 less 3.125 equal 12.625 (less commissions). I might have to sell puts at 10 (let say I get $2.50 whenever CSCO eventually trade at $11-$12): Supposed i get exercised on the 15 and 20, my cost will be $20 plus $15 =average $17.50 a share less value of puts sold $4.25 less $3.125 less $2.50 equal $7.625 (less commissions). I can increase exponentially the number of puts sold on the way down to almost get shares for free. LOL The market might just recover and I end up not being exercised, not having CSCO shares in my hands for the upturn (losing potential profit) but at least having premiums of $9.875 (less commissions). Need good accounting to manage that stuff though. Margin decrease by: 100% of bid of the put, plus 25% of closing price of the inherent stock less value of inherent stock less strike( if value>strike) Not a big deal to carry over if you re 100% cash. This strategy help me not to try to pick unsuccessfully the bottom, get frustrated and can continue day trading peacefully. Whenever the market turn for good (higher highs,higher lows), i will buy shares then, cup and handle pattern, not before. I might also buy back those puts at ridiculous prices (VXN low, time get close to Jan 2002 )if big upturn to get margin free, but don`t expect it will happen <ggg> Expect just a slight recovery and January effect to play with me. Just an idea for thought.I do not intend to show people how to make money on this thread since i learn a lot from all folks here.Just an idea to explore. Sorry for syntax (French speaking here) Sirinam