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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Nemer who wrote (35516)	2/25/1998 11:25:00 AM
From: Patrick Slevin	Read Replies (1) \| Respond to of 58727

That spooky trade netted me a point. God's gift to me for the day I am afraid. I would like to hang out and find a place to go short but methinks I shall run the risk of losing less money at the Wednesday afternoon gin game. The risk inherent in the futures is $250 per contract per point. It requires perhaps about $10,000 to control one contract which equates, I believe, to about $600,000 worth of stock. (In case you would like to take delivery. I imagine it would be a lot less messy than taking delivery on a contract of Hogs, but I don't know if a bare-footed Texan would be annoyed by that or not.) Anyway, trading S&P futures is primarily Risk/Money Management, like anything else. Except in the fastest of markets you have a reasonable chance of avoiding too much slippage. For example, my reversal was at 1040.40 and I was filled at 1040.50. Slippage equaled $25 per contract. (Even during that wave of short-covering blowing the top off the futures market). As I said, I had no idea where I would be filled going flat, but as the TRIN was at oversold levels going up I had a feeling I would be okay on the exit. In essence what I am trying to say is, unless the market gets very fast one has a reasonable chance of covering his/her butt with a properly placed stop order. Conversely, I know a fellow who went out on a day in November of '96 and forgot to place a stop. He remembers the exact date for some reason, and never forgets to place a stop anymore. He returned from walking his dog to find he lost 1 million in one day. Only in America. Well, this market is bogus, I'm going to play cards. See you later.