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

To: Esteban who wrote (30128)	12/3/1997 2:29:00 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 58727

First, which are you speaking of? Index options? Being long index OEX calls you're beat. CBOE traders will use the selloff to strip premium out of your calls. However, pulling the trigger on the trade likely gives you at or near the low price of the sudden move as no one will be anxious to bail you out of your position. Futures? One would hope a long SP7X position would have a stop somewhere....if the sell program did not run enough higher stops to get to you, you are still long and hopefully make an unemotional decision whether or not to tighten your stop. If, on the other hand, you are stopped out, hopefully you did not have a reverse stop in, as it is more than likely it will bounce at least slightly and nail you again. If you don't have a reverse and you're flat....such is life. Futures options? Don't trade 'em. I would imagine the same rule would apply as OEX options. <Why would the fact that they do have any predictive value for whether or not the dontrend continues?> I'm not certain what you are asking here, perhaps you left out a word in error. If you are asking do they have predictive value for a further move down I would say generally not immediately. It's a sell program that's all...if, on the other hand, the PREM stays low (Right now it's near FV at 2.17) for several minutes then probably there are waves of programs and we are hummed. But watching where the PREM generally trades as the day goes on gives one an idea whether it is an aberration or a trend for the day. Consistent PREM in the low end of the channel implies at best a choppy sideways to down intraday trend that you would not want to take a long position in anyway. Anyway, to each his or her own. This is part of what I look at when deciding whether or not I'm on the right side or not. If this works for you great --- if not, as long as we make money, right?