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Strategies & Market Trends : Galapagos Islands -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (30465)	3/4/2003 11:31:18 AM
From: habitrail	Read Replies (1) \| Respond to of 57110

I was with you until this part << options are a tool of the devil and only a fool would play them on the long side.>> If going long on puts is bad, is it better to sell calls?

To: Jorj X Mckie who wrote (30465)	3/4/2003 11:40:34 AM
From: Lazarus_Long	Read Replies (1) \| Respond to of 57110

Many options are not very liquid. The MM gets to set the price. You pay his price or do without or take his offer and swallow your loss. The MMs are at least as good at guessing market direction as most people. When the stock has bad news and is falling, the premium on puts is high. When things are good, the premiums on calls are high. That premium can often be your entire profit had you simply shorted. I generally prefer a straight short to options. However, I will get options when I'd like to take a position, but and not that certain of what will happen. An option limits my loss to a known amount in that case.