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Strategies & Market Trends : Action & Options- Taxikid plays -- Ignore unavailable to you. Want to Upgrade?

To: Allan F who wrote (3669)	2/4/1998 12:15:00 PM
From: taxikid	Read Replies (1) \| Respond to of 4339

i churn my day trade account, not my long term account.. grabbing opportunity as it pops up.. entry points.. example.. [my recent amazon play] in nov/dec i told a buddy of mine whose son is an institutional analyst{i have not met him}~ his father drives a cab... for my friend's car service co.. to short it @ 60 1/2.. or better.. write puts against it.. the highest puts were $55s and they were an astonishing $5each, even though they were $5 out of the money.. 1000 shares=$60k short, get paid $5000 to write puts.. if it got put to you.. it would have to be @54 7/8 or lower.. so you get $5k for them putting it to you and $5k for the premium.. you make $10k on $60, $30k cash..{short=margin} 33% max return for a few weeks. i had no free cash to do this, as money was locked and or floating between brokerage houses.. ends up that the stock went down to low $50s.. and he may have been called out.. he says that he didn't play it.. but if he didn't why would he ask me what was next? bottom line it was a great opportunity.. with low risk.. the $5000k you got as premiums was the hedge.. in case the stock went to <55 taxi