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Strategies & Market Trends : HEDGES -- Ignore unavailable to you. Want to Upgrade?

To: Laird Durham who wrote (7)	11/3/1997 1:20:00 PM
From: IKM	Respond to of 29

In the event, I bought puts on AOL at the open a week ago Friday, and then doubled up at the open on Monday, liquidating all my longs mid-morning. AOL rewarded me quite well, but like everyone else, I couldn't get through to my broker when I wanted to on Tuesday. What I found most frustrating was the inability to get real-time quotes and intraday charts. I found myself going to Yahoo! to get delayed quotes. By the time I figured out what was going on, then it was a long wait on hold before I spoke to a broker. Reversed course at the market at that point. Now I've acquired puts on AOL again, which are hedging my holdings in UMG. Because of its "overvaluation," it has more potential to drop in any downdraft. Of course, earnings due the 6th are a kicker and uncertainty, but in this market I figure that unless they post better than expectations, they probably have significant downside. If the rising tide of the market lifts all boats, I lose only my premium in the puts. A straight short is too dangerous, given AOL's recently demonstrated ability to surprise on the upside.