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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Sundar Rajan who wrote (27527)	10/30/1997 8:55:00 PM
From: Constant Reader	Read Replies (1) \| Respond to of 58727

With all due respect, I think your questions of Tom are unfair. Read his reply (#27523) again, then read your questions again.Think hard and see if you already have the answers to your questions. If you were not willing to take a 20 point loss you should not have made the trade or you should at least have exited it before you lost that much. Perhaps you had some logical reasoning behind this TXN trade: what was it? Fundamental or technical analysis or just "gut feeling?" Sounds like you are speculating (as described by Tom in his reply). Do you even have an exit strategy at this late point? Doesn't sound like you do, except you are unwilling to take a 20 point loss. What will you do when its a 30 point loss? Think for yourself before you throw your money around and then ask other people to find a way out for you. Were there any logical grounds for buying those other positions or did you just think they looked like a bargain at the time? Do you even have an exit strategy for any of them if things don't go your way? I am sorry to sound so harsh and I really do not mean to offend you or attack you personally. Your questions were really answered in Tom's prior post but you apparently didn't understand so I stated it differently, if less diplomatically. PLEASE: If you want to speculate, trade, or invest, KNOW the difference, THINK first, HAVE a plan, and STICK to the plan!!!!! I am a lurker who was once an active participant, but I grew tired of watching people self-destruct. Do yourself a favor: take a break and examine your motivation, skills, and performance before you do real harm to yourself and/or your family. I wish you the best of all possible results. Regards, Randy

To: Sundar Rajan who wrote (27527)	10/31/1997 10:00:00 AM
From: Tom Trader	Read Replies (2) \| Respond to of 58727

Good morning Sundar--re your posting to me >>Hope I survive this sale of puts. I am willing to take a loss but not a 20point one at this stage. Also by nov 3rd week the market may resume its upward trend or atleast give me a chance to exit during the next rally<< This is one of the biggest mistakes that traders make--which is to say that "I am willing to take a loss but not a loss of as much as 20 points". After all, you have no assurance that the loss is not likely to increase. In the case of TXN--decide whether that TXN is good value at its present price--if it is then you would want to hold on to it -- if it is not then the extent of your current loss has nothing to do with whether you should continue to hold the stock. Also factor into your considerations what you think that the market is going to do near term--the reality is that when the market goes down, almost all stocks decline --some more than others. There are some strategies that you can use but I am reluctant to suggest them because there is risk and I don't know anything about your personal position and how well you are able to tolerate the risk. >>Also, what would you do if you have several long option positions 3 to 6 six months out. Would you sell and take the loss now or wait to see if the positions can be salvaged somewhat. I have IBM Jan 95's bought at a higher price and need IBM to go up to 108 or so? I am tempted to buy more now and average down. Similarly INTC Jan 90, 95's as well and CPQ Jan 70's<< How you should proceed with these calls is a function in part of whether you are in a financial position to lose all your money and your outlook for the market before the options expire. You do have the benefit of about 10 weeks to expiry in the case of the January options and a lot can happen in that period--you may want to use rallies to sell covered calls against a nearby month in an effort to pull in premium. But if you do that -- do so only with the recognition of the implications of taking such a step. Again as always -- you need a plan as to why and when you will enter and when you will exit the trade. >>could you give me your EMAIL address please? mine is sundar_rajan@hotmail.com<< Sundar, I prefer to keep exchanges confined to SI--I used to have my e-mail address on my profile but got inundated with e-mail from SI participants that I just could not handle. Besides the exchange of views on SI gives everyone the benefit of what is said. hope you understand. Regards