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Strategies & Market Trends : Pump's daily trading recs, emphasis on short selling -- Ignore unavailable to you. Want to Upgrade?

To: Art Baeckel who wrote (6191)	12/12/2001 3:41:07 PM
From: Art Baeckel	Respond to of 6873

Steve, do you know if Pete Rose is still on the payroll? <g> <g> I could go on and on. How about those Mother's Day flowers? Oh, never mind. Back to my hot dog stand........... ART

To: Art Baeckel who wrote (6191)	12/12/2001 3:46:09 PM
From: Steve Fancy	Respond to of 6873

Agree Art, and glad things are going so well. Options are simple and give me a lot more leverage though they are tougher to get and out of. I made a super trade a week or so ago on PKI as I bought enough options to represent 4x the amount of stock for about 20% of what I would have paid for 1x the amount of stock. That said, they can be a real hassle and just as easy to lose money quickly as it is to make it. I'll try and help ya rush a WEBX drop:~) Steve

To: Art Baeckel who wrote (6191)	12/12/2001 6:52:37 PM
From: mishedlo	Read Replies (1) \| Respond to of 6873

Art if you are short selling PUTs you are going long. You meant selling calls, which is a bearish move. Selling puts is bullish on the stock. Buying puts is bearish on the stock. Selling calls is bearish. Buying calls is bullish. www.cboe.com M

To: Art Baeckel who wrote (6191)	12/13/2001 3:02:51 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 6873

Art, mishedlo is correct, you don't want to sell puts as an alternative to shorting a stock, you want to buy them. Buying a put is simply a bet that the stock will move lower whereas shorting or selling them is a bet it will move higher or trade above the strike you sold. In most cases buying puts is much safer than shorting as if a surprise buyout were to come along shorts are screwed and losses are potentially unlimited whereas with puts you are only out what you paid for them. You sell a put when you expect the stock to move up and you pocket the premium you received. This is one of the easiest ways to make money from options but also very dangerous. Buying options (calls or puts) you are always limited in risk to what you paid whereas selling or writing options (naked options) is generally much easier to make money but the risk is very high and it only takes one or two bad trades to wipe out a years worth of gains. If you are inclined to mess with options I would only buy them initially. The book I grew up on was "Options as a strategic Investment" by Lawrence McMillan but there may be better books on the market these days. Generally stay away from selling options until you understand how they work like the back of your hand. Feel free to write me if you have specific questions. Best regards, Steve