Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Stock Swap -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (11120)	2/1/1998 10:53:00 AM
From: Patrick Slevin	Respond to of 17305

Options and VOL. I occasionally get e-mail from a group of traders and once in a while I think it may be worth passing on. In this case, it's about options and it's from a CBOE MM who knows his stuff. So If you don't have an interest in options this is not for you. I left the last 2 paragraphs on because of an oblique market reference. I do wish this fellow would spell better. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Volatility..time to chime in. When you write options has nothing to do with current implied volatility. By definition an option writer is projecting lower future volatility. Additionally as many writers(who are actually former writers have learned)an implied higher than historical is no assurance of a "good" trade. In any market EVERY trade is volatility forecast. When you buy a stock...option..or future your are in fact forecasting a price at a date forward of today. By forecasting price you are actually creating an expected volatility. In the last many weeks we have traders destroyed by selling high vol..well above historical...only to see it double. This is and looks like will remain a market where implied does seem to fairly represent the sellers risk(fat tails). Additionally you really have to decide are you trying to sell volatility or are you trying to sell theta.........vol sellers will make money almost all the time....easily over 80% over long periods. The problem is the about 4 or 5 of the other 20%. The analogy we use at seminars is the issue of unprotected sex. Better than a 90% chance you won't be killed,,,,,would you do it. Just completed the yearly industry risk management conference. This year the conference was held at the Doral in Florida and had over 400 folks in attendence. The biggest topic of conversation this year was the privatization of social security. We had presentatioons from the folks who developed the system for Chile. They have joined with the CATO institute to promote the idea worldwide. They have a website at..ready for this...www.socialsecurity.org...really pissed off the social security admin. but who cares. It is an interesting visit. Abbey Cohan from Goldman also spoke and remains bullish with a Dow Target of at least 8700. She expects lots of vol. in interest rates and thinks the bond will trade 5.550% - 6.25% the next year.

To: Patrick Slevin who wrote (11120)	2/1/1998 11:04:00 AM
From: Robert F. Newton	Read Replies (1) \| Respond to of 17305

Re: Megaworld - I'm not in it currently and don't anticipate jumping in anytime soon ...................In general, I try to say away from most BB stocks especially if they are under $5.00 and are thinly traded. The term "Bagman" becomes very real to novices who get into these issues.............................. P.S. Re: Newark..............Some very good Spanish & Portugese restaurants in the Irongate district (????) if my memory correctly recalls. In my past life, we acquired a business in Millburn..........So, I spent some time in the Newark area....Used to date a girl from Union.............