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

To: Jacob Snyder who wrote (55000)	11/1/2001 3:50:09 PM
From: advocatedevil	Read Replies (1) \| Respond to of 70976

ST - Trading FWIW, I pressed my AMAT short here at $36.55. AMAT short play now averaged at $36.15. (did not press LRCX) AdvocateDevil

To: Jacob Snyder who wrote (55000)	11/1/2001 6:41:23 PM
From: kdavy	Read Replies (2) \| Respond to of 70976

Thanks Jacob: One thing everyone needs is luck. This turned out to be a very profitable trade. Here is how look at the risk/reward in this case. Lets take amat. If I want to buy 1000 shares of amat (or 100 share, people can do their own scaling). Tuesday scenario. Amat was trading around 33 or so. This was my plan. Instead of buying 1000 shares at 33, I would buy 10 options contracts out of money (not pay more than 10% of the stock value) for 2.55 each share ie for $2550+commission. I am looking at the upside and downside. If the stock goes up I sell my options at a profit (any where more than 40%). I win. On the other hand, if the stock price goes down. The options price will go down but will decrease much slower then the stock price. If the stock price goes to 30 I would buy 1/2 of shares ie 500 amat shares. Again from here if the stock price further goes down to 27 I will buy another 500 shares (average price 28.50). Now begins the waiting game. If the price goes back to 33 within a month I win big. (I was ready to buy stocks at 33 in the first place, this affords me a chance to buy at lower prices. I would not buy options without backup from the stock purchase.) This strategy will work in todays environment for next two months. I will only try this when I am ready to buy stocks and willing to hold them. I will work best when the market is range bound or upmarket. In a downmarket all bets fail. In January I will not try this because I expect the stock to go up significantly. I will be fully loaded with stock after December second week. Until then hit and run. Coments from the board are welcome to improve this strategy. Please try at your won risk. Not a recommendation. I have been at this game for a longtime and have been burned so much that I do not recognize myself anymore. Cheers. kdavy PS: I need few days for this to sink in