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

To: D & G who wrote (11826)	12/18/1997 8:27:00 PM
From: Bilow	Read Replies (1) \| Respond to of 18056

I'll take a whack at those options profits... Man, if I had kept some WLA puts a couple weeks longer, or my TXN puts, I would of had some monstrous money. It always seems like I should just let them run to expiration. (Sorry for the bad word.) I like to see a 100% profit, and I expect to see more than half my transactions lose badly. But it's more fun than profitable for me. Who knows. I'm pretty good at figuring out where things are going, but sometimes I am too early. So I've done better with far expirations. (Though I closed out an overnight double on dow puts today. Maybe I should of waited till tomorrow, cause the market doesn't look healthy overnight.) -- Carl

To: D & G who wrote (11826)	12/18/1997 8:54:00 PM
From: Jack Clarke	Read Replies (2) \| Respond to of 18056

DJF: You asked about profit percent on option trades. I have had similar experience to yours in the options game. My biggest mistake is to hold on and let a profit turn into a loss. Inexcuseable, but greed is a difficult emotion to conquer. I do not have a fixed profit objective, by and large, but I often now ratchet stops when the market is going my way. Also I tend to do wide spreads (15-20 points on the OEX)-- rather than naked long options. These spreads can be held much longer and can take a lot of heat until the market (we hope) starts to go your way. For example, yesterday I bought the OEX jan 460/440 put spread for 4 1/2, so the potential profit is 15 1/2 (20 points less the 4 1/2 I paid). You are only out 4.5 rather than 9.5 which you would have had to pay for the naked long 460 put. I would close the short side if it gets near parity, to avoid the risk of assignment. My best single piece of advice is to "ring the cash register" when you have your desired profit and don't be greedy, but I don't have a recommendation for where to put the percent. Also I freeely admit to failing to do this often enough in my own trading. Jack

To: D & G who wrote (11826)	12/18/1997 9:08:00 PM
From: The Perfect Hedge	Respond to of 18056

D&G- i play alot of options and I have wrestled with the same question and I am now taking profits intuitively.Sometimes I take 25% if I feel I can get back in again cheaper.In a market like this one lately I take any profits.You can't tell what's going to happen next.Then you have the home run plays where you might let your profits run but I only try for 4-5 baggers when I completely hate the fundamentals of the co and the charts say I've still got more movement left in my direction.Ta is great and neccessary for me in options.It lets me know if the stock is topped out or bottomed out.Otherwise it's a guessing game.I think you have to have different strategies for different stocks.GD