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Strategies & Market Trends : The Market Taught Me That...... -- Ignore unavailable to you. Want to Upgrade?

To: Richard Babusek who wrote (62)	11/7/1997 12:59:00 PM
From: benmoti	Read Replies (1) \| Respond to of 151

Ricardo, Thanks and I'll get back to you. If you are interested in low P/E check apm has p/e of 5. Behrouz.

To: Richard Babusek who wrote (62)	11/8/1997 7:45:00 PM
From: benmoti	Read Replies (1) \| Respond to of 151

Ricardo, You did good. Let's go over this once more. The stock had a good fundamental Got $2 by selling 12.5put The stock was put to you, that is 12.5 - 2 =10.5 what you really paid for it. Obviously the stock price must have fallen to under 12.5 I asked <<What if ECI would have dropped to say $5>> and you responded << I probably would have a stop at $8.5 and if it executed, sell another put @ $7.5 or $5. (or both).>> Stop at 8.5 would have lost you 2 since cost~10.5 Selling another put say you received $1 and the stock put to you at $5 Now the stock cost you 4 = 5 - 1 plus the 2 loss from above cost you 6=4+2 At this point repeating the above scenario until the stock drops to 1, then Stop at 4 sell put@3 put to you @3 Stop at 2 sell put 1 implies -2 + 1 -2 +1 So this process looks like one step forward two step back until the stock is trapped, that is when it can no longer go down. Losses add up and if the stock price stabilize at one point and stays there, then we have to deal with the burden of carrying these losses until the stock bounces back. In above scenario $ earned thru sell put vs $ lost at every Stop, if their sum is positive then we have a wining hand otherwise one should be careful. << The strategy is called writing covered calls (for the premium).>> Thanks and I'll stay away from this strategy . Although writing covered call (WCC) and writing naked put are considered to have the same profit & loss, using WCC has the disadvantage of dealing twice with bid and ask spread. One for the CC and the other for the stock. I normally use cboe site as you suggested and the following site has several strategies eztrade.com Finally what do think about index trading on oex, spx..etc. Behrouz.