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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 (6198)	12/13/2001 8:32:22 AM
From: Art Baeckel	Read Replies (2) \| Respond to of 6873

MRVL, any thoughts here on a short? I have a small short position @37.71 and am considering adding with yesterdays close of 39.1 It appears to be running out of steam. I have plenty of room to add with out running into trouble with my allocation. Any comments are welcome! Thanks. ART

To: Art Baeckel who wrote (6198)	12/13/2001 9:51:37 PM
From: mishedlo	Read Replies (1) \| Respond to of 6873

Art the VERY best book on options IMHO, and it is a long term strategy is called LEAPS. LEAPS are nothing more than long term puts or calls. LEAPS can be up to 2 years. Time premium expires very very slowly. For example the 04 Jan 5 calls on RMBS are 5.70. If RMBS goes broke you risk $5.70 If you buy the common and RMBS falls to Zero you lose $8 1/2 or so. If RMBS does nothing by expiry in Jan 2004 the calls will be worth 8.5 - 5.7 (or a net loss as opposed to holding the common). But do you really think that sometime between now and 2004 RMBS will not rise a couple of points from here. I do (but I also think it will fall first so I am waiting). Now If at any time between now and Jan 2004 RMBS rises to 15 the calls will be worth a minimum of $10. It gets interesting above that. Should insanity strike (or RMBS wiuns a lawsuit or two or whatever) and RMBS rises to $30, you will make a far far better % on the leaps than buying common. The trick on leaps is to find something you believe in (or think will go up over the long haul) and buy calls. Or think you have something that will go down over the long haul - buy puts. At Naz 4000-5000 Leap puts on the QQQ , without worring about all the bounces, short squeezes etc, daily ins and out would have been a huge huge success. Did I do it, no it was too easy. I was busy losing money chasing bottoms on tech. Hindsight of course. If you believe a SUSTAINED rally is forthcoming (warranted or not) leap calls should be considered. They sure would have been a huge success from the bottom. Now, if we retest the bottom, I am going hugely long (over-valued or not) with leaps. If you believe in a SUSTAINED drop then leap puts are warranted. If MRK drops to some insanely low price like $35, leap calls on MRK will be a huge bargain. If you think IBM is a surefire short then leap puts on IBM are warranted. The best plays are to find something non-volatile (makes for cheap options) that you think is going to explode or implode. Leap puts on ENE HAL DYN PVN (oh my gosh - I could have retired). It took time for each of these to implode. But they all did. Meanwhile everyone (including me) was busy shorting and getting stopped out on tech sort squeezes. LWIN has leaps but they are so damned expensive cause of the risk. The trick is to find something that is more or less ignored that will do well one way or the other. Suggestions on that as a long term play? Possible suggestions FNM HD HI (puts) RMBS MRK (calls) M