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Strategies & Market Trends : Investing during a Bear Market -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (185)	11/14/1997 8:28:00 AM
From: John Hunt	Respond to of 226

Dale, FWIW, I have been avoiding margin by buying deep-in-the-money puts and banking the rest. Typically these have premiums of $5 to $15 depending on the stock price. At these prices nobody else wants them and I am buying and selling with the market makers. There is time premium but little volatility premium. However, the bid-ask spreads are wider than normal. As long as you don't buy more than you would short, and you keep the rest in cash, you have limited risk, zero margin worries and the interest on the cash helps to pay for the premium on the puts. Not recommending this to anyone else, just explaining what I am doing. John