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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Barbara Barry who wrote (7788)	11/13/1997 8:11:00 PM
From: Jack Clarke	Read Replies (1) \| Respond to of 18056

Hi Barbara: Re: your OEX puts, I have also sold puts for a "double" and then seen them go to a multiple of X5 or 10. More often I have held out and seen that double evaporate into a loss. Having a spread helps one to hold on, since your capital doesn't all go to waste and you can ride out the market moves. For example, you could sell the 840 puts short against your long 860's, especially if you have already captured some profit. Remember you haven't made ANYTHING until you ring the cash register. But after saying all that, here's what I have: Long Nov 900 puts (half original position and paid for by selling the first half at a profit). Only a week of life left in 'em. Long Dec 890 puts/short Dec 850 puts. It was originally a 1:1 spread, but I covered half the short 850s at about break even, so now I am backspread 2 long puts to each short put. A very bearish position. Spreads make for more effecient use of capital. One is not supposed to have a market opinion when trading options, but I am bearish, for all the good reasons we see on this thread, and if the current rally continues, I plan to cover the rest of my short Dec puts (at a profit, presumably) and hold those long puts for the "big one". It never hurts to keep a few long option contracts as a "lotto ticket". Good luck. Let me know what happens. Jack