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To: Nancy who wrote (15653)	12/16/1997 7:27:00 PM
From: Judy	Respond to of 50167

Then the puts are insurance for peace of mind, after all the reason for buying the cheap puts were for protection to initiate longs. Just like the home owner's policy one pays for, and one doesn't mind if the house doesn't burn down.

To: Nancy who wrote (15653)	12/16/1997 7:45:00 PM
From: Tom Trader	Read Replies (1) \| Respond to of 50167

Nancy -- an elaboration on Judy's response The reasons why I am looking at purchasing puts is because we are in a strong down-trend with the tech sector and one cannot say where the bottom is. One thing though is that the tech sector's corrections are normally sharp and swift -- not the kind of grinding decline that affects some other sectors. The real exposure to the techs is the Asian situation and given the market is a discounting mechanism, I suspect that if one buys puts that are about 6 months out, the odds are that by that time we will have a good sense of the impact on profitability of the Asian problem. Also, we are bound to have reflex rallies from time to time -- at which point one can sell covered calls--to help recover the cost of the puts. The other alternative is to stay on the sidelines until the dust clears. The one thing that I know is that I will not go aggressively long in this environment, especially on the techs, without protection -- if you want to know how badly the bottom can fall out of a sector even after it seems that we are in safe territory just look at the gold stocks. BTW today's follow up to yesterday's rally was quite unimpressive -- I suspect that it will not be long before we start sliding again.