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

To: Patrick Slevin who wrote (30196)	12/3/1997 8:35:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (2) \| Respond to of 58727

Patrick <so I sense I'm too basic...> Be basic.... it helps everyone else.... btw, just checking to be sure you mistyped...you mean shaking out the longs, right? not the shorts? btw2, today I was trying to sell my calls for a buck profit and sure enough...BAM down it went...but trend still in place I am going to start looking at selling 1/2 position when it bumps up against resistance and buy it back... if the trend is still in place <Okay....just checked 10:21 EST this morning. Sell Programs came in as the PREM dropped to 0.35. The SP7Z dropped over 2 points shaking out shorts and by 11 was higher. Immediately after the 10:21 drop in the PREM it returned to FV and the market bounced. Just a sell program to run the longs. >

To: Patrick Slevin who wrote (30196)	12/3/1997 9:31:00 PM
From: Electric	Read Replies (4) \| Respond to of 58727

Patrick, I really enjoyed your message, very well said, and hardly rambling.. I had a question for you then.. You mentioned that you trade the OEX this way, are you saying that you trade base on premium, wether or not the actual price coincided with the premium? Do you have a system that you follow? like the morning afternoon theory you mentioned? I am interested in hearing more of what you do and any insight to the MM's manipulation. I had thought the premium was based more on supply and demand. Thanks alot!! Electric

To: Patrick Slevin who wrote (30196)	12/4/1997 11:55:00 AM
From: Kevin	Read Replies (1) \| Respond to of 58727

Good morning Patrick. I was going through point-by-point and responding to your post when it suddenly got wiped out. I'll try again. >>> A head fake. It's not necessarily a head fake and it certainly is very real.<<< Maybe I didn't understand your comments that I read yesterday: For example, if we presume that the SP7Z S1 point was valid at 970.90, we can see that at 11:48 EST that point was pierced. At 11:54....6 minutes elapsed time....SP7Z bounced off 967.70 just above S2. Someone unaware of the likely logic behind this move would perhaps be tempted to bail out of a long position....which of course is the reason why the move was so abrupt in the first place, to stop out the longs rapidly. Correct me if I'm wrong, but you just described a head fake didn't you? Market gets pulled down to scare out people with long positions...people who do not realize the 'overall plan' to shake them out. So you're suggesting that a person should hold their longs in this situation. Right? >>>So think about it. The OEX closed up about 2 bucks at 468.20. The OEX 465 puts closed down 1.62, the 470s down 1.75 The OEX 465 calls are flat and the 470 calls are off 0.25 Who won? Certainly no one that owned either.<<< I doubt anyone will argue with you that it can be diificult to make money going long index options. The premiums and spreads can be brutal even if the original market read was correct (like yesterday). I have been considering switching to SPY or SPZ7 for my trades because of this. >>>lisa tells me you have a mechanical method that works well for you to day or position trade OEX. Personally I cannot do that. Without checking, I'm going to guess you have bad trades on inside days. Because inside days eat premium. When you have a trending day you certainly make out well if you are on the right side.<<< Inside days eating premuim has nothing to do with the success rate of a mechanical system. Inside days eating premium is a downside to trading OEX options (long). I think instead of discounting the value of a mechanical system, you are discounting the value of trading OEX options. Don't you go long index puts and calls? Sounds like you should consider the SPY and / or the SPZ7 as alternatives as well. >>>For me, anyway, developing a sense for intraday trend and why it is or is not an aberration in the sense of running stops as opposed to a true turn precludes predetermined mechanically generated exits<<< So what you're saying is that you trust your heart and instinct to tell you when to sell, and feel that is better than seeing a signal generated? >>>I cannot explain how to watch certain things like PREM. It requires practice. I was taught by someone who can backtest PREM moves all the way back into the '80s. On balance it does provide clues but no computer (yet made) is going to tell me to sell here or buy there.<<< I know how to watch PREM (I call it Fair Value) and am surprised that you constantly refer to it since you do not trust mechancial systems. I assume you realize that buy and sell programs that are triggered because of the PREM are mechanical system (which I discussed yesterday in a post sent to Esteban but addressed to you as well). If it wasn't for the mechanical systems which use the PREM, the PREM would be worthless. >>>Agree or don't agree, I do not dispute how you or others may see it that's just the way I trade it, For Whatever It May Be Worth to anyone.<<< I don't want you to feel that I'm disagreeing with you, but rather questioning some of your comments. I look forward to your response because you have eft me a little confused. Thanks! Kevin