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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (24776)	1/16/2005 6:25:15 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

They Are Selling Naked Calls on Tons of Other Stocks Right Now but resisting the obvious temptation to do the same, on GOOG. that doesn't make much sense to me. it's not like GOOG is operating in a vacuum. it is highly correlated with other tech garbage, which will typically float or sink together, with varying degrees of beta and IVs. so shorting 10 other garbage stocks but staying away from GOOG is not what i'd call a "safe" strategy. i think the safety component has to do with sizing the trades right. having said that, i don't meant to imply that shorting GOOG (or any stock) is safe. i fondly remember when QCOM hit 400 in late 1999 and i thought it was overpriced, but i decided i should hold my position (very long QCOM calls). whaddaya know but the stock went to 800 in about a month. who would've thought that was possible? at 400, the stock was already about a 12-bagger for the year. it must have been a five-sigma event in terms of the options. i heard it was very tough on some of the call sellers.