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

To: Sam Citron who wrote (53239)	9/27/2001 7:31:55 AM
From: Sun Tzu	Respond to of 70976

Everytime I tried to answer you question SI crashed. Here's hoping it'll stay up this time. The quick answer is that success in stock market is about playing the weighted average possibilities you see while keeping your options open. Just because I think there is a 50% chance XLNX will go to 17 doesn't mean I should load up on a short position. What if I am wrong and it moves against me? As it stands, in my current position, so long as it moves to 20, I will meet my $17 profit target. What is more, because I am not delta-hedged, if the stock goes below 20 my short position increases in value faster than the puts I sold. So if say at 19 I change my mind and decide it is headed below 17, I can still close the put position and be ahead of the game. In the mean time, those puts give me some cushion on the way up. ST