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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Box-By-The-Riviera™ who wrote (2942)	10/22/2006 9:33:06 PM
From: SliderOnTheBlack	Read Replies (1) \| Respond to of 50154

re: GLD looking well. I've mentioned what I thought "THE TRADE" for the average gold bug was in this atmosphere 4,5 times over the last couple of months. For those that don't want to have to be perfect market timers..."The Trade" -- was not direction, it was movement itself... VOLATILITY. And "the trade" on volatility is option straddles. Here's what the volatility straddle has looked like of late: Volatility: Use it, or it will use you." The HUI has been the posterchild for utilizing straddles for the last 2 1/2 years.Timing extremely fast and deep corrections followed by equally volatile breakout rallies isn't easy. And the beauty of using option straddles in volatile sectors is that you don't have to be perfect in your timing. You're giving up some upside -- in exchange for time. And the best way to do that over the long cycle is with LEAPS. The HUI had two recent 100 point corrections; one in 2004 and another in 2006 before this May's collapse of 120 points. If you bought deeply out of the money LEAP PUTS as insurance into the tops and deeply out of the money LEAP CALLS into the abyss...you collected "big" every time on both plays over the last 2 1/2 years. If this correction returns us to pre-Katrina/Rita levels. bugs will need all the time they can buy...because, Bernanke seems to be pulling off the impossible. -- whodathunkit? SOTB