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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe -- Ignore unavailable to you. Want to Upgrade?

To: KFE who wrote (444)	3/14/2002 3:58:51 PM
From: David Lind	Respond to of 1064

KFE, "Actually, many option strategies will allow you to be slightly wrong on your prediction of the underlying and still be profitable." Okay, what if you are just a little bit more than slightly wrong? You can easily lose 100% of your investment. Whereas if I trade a list of solid stocks, I can easily wait for a rebound or take a small loss with a comfortable stop. Or, if you are expert in options, you can roll up, down or sideways. But not if you are novice. That's my point. It all sounds very easy here. But take an honest survey of those who have put this into practice, and see how they've faired. "Other strategies such as straddles can let you profit from a large move in the underlying even if you don't know the direction." And if your stock doesn't make a large (huge!) move? And at just the right time? Zero. Zip. A 100% loss. And try rolling that out to farther months. Fun, huh? You miss my point entirely. SI is a great place for discussions among like minded people. But options are risky. Extremely so. And discussing strategies such as diagonal spreads with someone who CLEARLY belongs in Investing 101 is, in MY mind, irresponsible.