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 : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: habitrail who wrote (30462)	3/4/2003 11:16:20 AM
From: Jorj X Mckie	Read Replies (2) \| Respond to of 57110

shorting -theoretical unlimited move against you (unknown risk) -one for one moves, no real leverage (good and bad) -no time erosion on position -tough to short when the stock is moving down (uptick rule) long puts -known downside potential -leveraged position (good and bad) -time erodes premium -other things can erode premium -Entire investment can go to zero -Options are a tool of the devil and only a fool would play them on the long side. I'm sure that other can add to the list Disclosure, I own SPX and SOX puts<GGG>

To: habitrail who wrote (30462)	3/4/2003 11:49:25 AM
From: herry iball	Read Replies (2) \| Respond to of 57110

habital, last year I had a long position in a stock (2500 shares) that had closed at the days highs, was in a beeyootiful uptrend, and I was looking for a nice gap up to sell into in the morning. Moody's downgraded em overnight, and news came out (this was during enron mania) that they may have to re-state earnings. Thing gapped down 4 bucks, and kept tanking with no bounces. After a few blindsides like that I just said screw it, and now I just trade futures (intraday scalping) and options. Many will tell ya that it is impossible to make money trading options....to this I say, huh? My little rant about this topic: siliconinvestor.com The important thing is to roll over options prior to their becoming front month (unless you're just scalping 1-2 day moves). For longer term trades, I ALWAYS roll over to avoid time decay. I just sold the last of my March's last week before the weekend to avoid time erosion. I will be out of my April's by the end of the 3rd week of March (either out or rolled over to MAY-JUNE). I also used to buy way out the money's for the big payday, and ended up having most of them expire worthless. Now, if I expect a large move down but don't know when....then I buy 3-6 months out (such as the homies like CTX and LEN)...when you know they'll crack, you just don't know when. Mostly though, I buy near the money or in-the-money....the deeper in the money, the more it is like trading the underlying itself. Cheers.