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

To: Sundar Rajan who wrote (27534)	10/31/1997 12:56:00 AM
From: Brad Hill	Respond to of 58727

Sundar--I sympathize with your predicament, and also appreciate the tough advice Randy has given you. Developing good exiting technique is definitely the hardest part of trading, whether stock or options, but the difficulty is drastically compounded with options because of the deadlines and constant erosion of value. Learning how to exit in a method that works for YOU is a curriculum that you pay for with losses. I don't think this it's easy or cheap for anybody, except perhaps natural trading geniuses. As Randy says, having a plan is vital, and sticking to it despite your emotions. I tell myself out loud sometimes what I'm attempting with a trade so I don't forget in the fire of greed and fear. Is it a flip attempt? Am I intending to hold for the day with a late-session exit? Am I willing to lose two points, or three, or five? How far out on a limb will I go, how deep into expiration will I hold? Am I hedging, and willing to lose it all against opposing positions? It really takes discipline to stick to your plan. I've been known to walk away from the computer so I can't trade away a position prematurely if I don't think I have the courage to watch the market. During my time as a trader, not sticking to my plan has cost me more money and grief than any other single factor. Almost any plan, if followed consistently, is better than no plan. Compared to Tom's advice, my two cents is worth about one cent, but it does seem clear to me that one strategy for taking positions several months out in time is to hedge against near-term disaster. You've run into near-term disaster. I have been amazed at the last-second recovery of positions that are much closer to expiration than yours. Please understand, I'm not recommending any course of action. If you didn't have an exit plan before, it's not too late to formulate one now. Tom may have more explicit suggestions. He has helped me very much with my crises in the past. Good luck, and hang in there! Make sure you can trade for another day, that's what I always tell myself. -- Brad

To: Sundar Rajan who wrote (27534)	10/31/1997 1:27:00 AM
From: kiwi	Respond to of 58727

Just a quick thought from somebody returning from a great time with a knife packing, pumpkin carving three year old. Almost as frightening as your TXN puts. Could you possibly "roll out" of your puts. Youll have to check the prices. If you buy the Nov 120s back, now trading at 17.5 * 19 you would be at a loss of 15.5 not counting your helpful broker (19-3.5= 15.5) Then go out a month or two and write puts at a lower strike. For example the Dec 105s TXNXA trading at 9*10. (-15+9=-8) your still under the water $8, still less than $15. If you want to speculate more, go more in the money and or farther out in time. Thats if you dont want to own TXN. I to am suffering from a break down in discepline and own calls on TXN wich I am way passed my get out point on because I made the mistake of thinking what a great co. this is and it must bounce back tommorrow, I should have jumped on the bounce but I was to greedy. Has not happened yet and may not. SI is one of the few places you pay very little for the education you recieve. I am sure their are other people with way more experience than me that will have better ideas. Throwing out ideas from the pumpkin patch. kiwi