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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: Jerry Olson who wrote (5593)	2/27/1998 1:30:00 PM
From: Ken Beal	Read Replies (1) \| Respond to of 120523

Hi Jerry. Well, I did good and bad again. Monday I bought 10 contracts of DELL Mar 120 at 12 1/4 (I would have bought a higher strike for less $, meaning I could have picked up more contracts with the $12K, but Discover Brokerage couldn't see them! They are there today, but weren't at the beginning of the week). I sold them last night for 13 1/4 -- a thousand dollars profit, not bad for a week's work. Only problem is, it's been running like wildfire today, now at 20 1/8 -- I lost a potential $7K if I had waited until now to sell them. Gotta watch my trigger finger... Actually, my idea yesterday was sound: I was going to sell the 120s and pick up some 130s, but my day job got in the way ;-). So I picked up 20 135s this morning at 7 1/8, and they're up to 9 1/4 now, so even though I lost some of the run, I still managed to capture about $4K so far today (on paper). I think I'll hold these through the split. Actually, would it be better to keep rolling up to a higher strike price? That seems to make sense, as I can get more contracts for a lower price, which gives more return for a $1 move in the underlying stock. But then it could burn me that much more if it moves down, too. How about selling the 20 contracts and picking up another 20 at a higher price? That way I'm socking away some of the profits, my potential gain is pretty much the same, and my potential loss is much less. (I'm fairly new to options, and I'm sure we've got some lurkers who would like to know more as well.) Thanks for your time, Jerry -- hope you had fun in NY! Enjoy, KenB