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

To: jt101 who wrote (703)	11/27/2002 10:36:12 PM
From: Dan Duchardt	Read Replies (1) \| Respond to of 1064

Hi jt, I'm pretty much in the same boat with you on the futures. Amazing how much money I lost shorting them while the market was falling. The sad fact is I could have gone long a year ago, not traded at all, and lost less than I did getting in and out of mostly short trades. Whip city here we come!! I started trying a few longs around the time NQ was testing the July/August lows. After getting beat up doing that I finally tried shorting again, right in front of this massive rally. I've put that on the shelf for now, and am slowly rebuilding my account with the options. I had managed to accumulate a decent QQQ long LEAPS call position, but started writing near term calls and taking partial profits on those longs way too soon. It's a mental game that needs to be conquered; you get beat up so bad trying to stay in positions that you finally are too timid when the big move comes your way. It's easier to do with options where you have better ways to limit risk than with the futures. Besides the QQQ and a few assorted stock options on both sides I now have an OEX put spread DEC460x420 that is losing ground, but I can afford to ride it for the potential gain. If we go higher on Friday I will risk another couple points to go to 470x420. The nice thing about the long options and wide spreads is that the rate of pain increase diminishes as the pain increases. That's easier to deal with than fear and eventual reality of getting creamed with the futures. Narrow vertical spreads of only one or two strikes don't do very well unless you can carry them to very near expiration. They are not likely to lose very much, but it's hard to make them pay off unless you get the end game right. Good luck in your search.. you are certainly not alone.