Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Paint The Table -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (17996)	3/10/2002 9:19:58 PM
From: John Pitera	Read Replies (1) \| Respond to of 23786

Hi Tom, you know that AES idea we looked at has worked out pretty well. As you'll remember the March 5 puts were selling for .55 ask just over a week ago when the stock was at 5.00. I was suggesting going long AES and buying the March 5 puts for .55 or .60 and thus the max downside was .60 or 60 bucks plus commission per 100 shares of AES. And commissions can be pretty darn low, at Brown you could but 10 puts for 17.50 and buy the 1000 shares for 10 bucks limit order. And you don't even have a sell commision on the options, as ideally they expire worthless. (lots of firms have low options commissions these days, as you know) Like I said in the IM, ideally you want to get a 4 to 1 or greater risk-reward ratio, which has now been achieved in AES, with it closing at 8.29 on friday. We should try to look at a few of these defined risk plays every month. As you know we've been watching these merchant energy companies for a little while, you're long a couple of the the last I heard :-) John