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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: LastShadow who wrote (5501)	2/23/1998 4:07:00 AM
From: BoNg-N-BoNg	Respond to of 120523

Watch List - 2/23 Long: (2-5 days) CATP - 44.25 Short: (2-5 days) CRUS - 10.56 FAST - 46.06 KMAG - 13.68 PHI - 25.68 DAytrade: OXHP - 20.125 good for long and short.. just a thought.. eL... p.s....thanx LS for DATM analysis..

To: LastShadow who wrote (5501)	2/23/1998 11:22:00 AM
From: Ken Beal	Read Replies (2) \| Respond to of 120523

MISC: Profile of an options play. First I'd like to state that I think I did some things terribly wrong in this options play, even though I made 50% on my money in 3 weeks. If I had played it better I would have made 650% in the same amount of time. I'd like to detail my play so that others (Jenna, Jerry) can pick it apart and help us all learn. On Tuesday, 2/3 I bought 2 calls and 2 puts, DELL and MSFT -- a straddle play, although it ended up losing a ton of money. I bought 20 contracts of each (so 80 total): DELL 100 put ($3750), DELL 115 call ($2875), MSFT 150 put ($3500), MSFT 160 call ($3875). I spent a total of $14,000 on these options. On Thursday, 2/12, I got scared about the puts and sold them all, the DELL netting me $1465, the MSFT $840. So far my loss is about $5,000. Wednesday, 2/18, DELL released good earnings. Thursday, 2/19 (one day before expiration), I sold the MSFT call just to get out of it for a net of $90 (almost not worth the trade!). I sold half the DELL for $9470, watched the other 10 contracts go up Friday morning and sold them eventually, (chasing it down with limit orders) getting 9 1/5 also ($9470). So my $14,000 investment became $21,335, or a $7,335 profit. Had I put the whole amount into DELL calls, though, the $14,000 would have become $92,229! So my questions to you option traders: did I do a good job? What is the ratio of winners to losers in your option picks? (Mine for this round is 1 out of 4, which still paid off.) Is this form of straddle worth it? I was thinking it would be good for volatile stocks, but MSFT stayed within the range and DELL only made me money because I timed the earnings. Would I have been better off with the March calls? (DELL is up almost 2 points today, could have held onto more profit.) And of course, anything else you can think of that I should have done better I'd appreciate. Finally, do you think DELL will continue to perform this well? If so, this is a good ongoing earnings play (I made money on DELL calls back in September, then lost twice that playing with options in October; this is my first foray back into them since). Thanks, KenB