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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: kodiak_bull who wrote (22649)	1/4/2005 12:44:14 PM
From: bull_derrick	Read Replies (2) \| Respond to of 23153

Kodiak, I know you've expressed doubt on the short side of the homebuilders but I went short on TOL again but this time through buying some Leap puts. Bought 10 of the Jan'06 80's. They weren't cheap but the downside is limited if the speculation continues. I went with options that were pretty deep in the money so that the time premium wasn't too great. A friend of mine in Boston owns a business that runs title documents back and forth between attorney offices for settlement and the various municipal registries. She reports that where business was booming six months ago and lines were long, the registries are dead now and her business is slack. Granted Boston is only one regional market but it may be indicative of future weakness. If TOL hit 40 sometime in the next 12 months, that would give me an exit somewhere between 35-40 depending on where I pull the trigger. For now, I've only done 10 options as I don't want to take a big position on this but the timing feels right. With a couple of more nudges from the Fed and I'm hoping some credit tightening coming out of Fannie Mae as their problems continue to unfold (I believe there's a few unexploded mines at FNM but the institutional holders in that stock refuse to sell off for some curious reason, I know Fidelity holds a huge stake in it). Anyhow, we'll see how the option trade goes. I bought very early this morning before the swoon in TOL so far today so I'm in the money at this point but too soon to call it a winner.