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To: Steven Bowen who wrote (3260)	2/27/1998 7:25:00 AM
From: steve goldman	Respond to of 12617

Steven, I am not trying to be elusive in anyway. There is no such thing as play money. Infact, this money is 100% of the kids' cash. Under no circumstances would I tell him to play either of the three options you presented. BUT, between you and I, if you are going to say "you only can choose one of these three" to get money to work, a spare $500 that we got as a gift from our employer, something that wouldnt impact on the $250,000 in the rest of the account, I would say, if the client demanded the highest risk/reward ratios going, to look to barely in the money calls of a stock you would consider owning. Think of it as hit or miss. YOu have just as good of chance for that 1/4 dollar call to zero as it does going to 3/4. Personally, I would do neither, but add it to the portfolio and look for sound investments or trading. In my opinion, going long out of the money calls is a suckers bet. Its like playing roulette. You win once and they put a big pile of chips in front of you, only to give it back 1/4s at a time. An example of what I would call a better options play: I had been buying WDC from its recent low. When it sprang up about 30% to 20ish, I sold apr 25 , 5 points out of the money with 8 weeks, calls against some of the position at 3/4. The stock then settled back a pair of points and yesterday I covered the calls at 1/4. Sure, in retrospect, I should have flat out sold the stock, but I still wanted the position, just had felt it had room to grow. Nonetheless, the 1/2 point hedged the downturn in the stock and if it moves higher again (obviously I think it will since I keep thestock) it is an extra 1/2. As well for positions in dell or any other high flier, you could buy puts to protect your profits but then also sell calls to get income (including some of the premium you laid out for the puts) so you net zero, a small debit, or even a credit. Again, a hedge on the position. You can also buy some stock, 1000 shares at x price. You want to double down. You know its imprudent. So buy 10 calls around that price and try to sell 20 calls at higher price so that the 20 you are writing covers the cost of the 10. The additional 10 (1000 shares underlying) costs you nothing. Theonly downside is if the stock moves up to the strikes you sold, you have to give upthe 10 calls at lowe strikes and the 1000 shares. nOnetheless, you doubled your position between certaain strikes for no money. To me, these are just a few of the saavy options strategies I would play. I would not consider buy the wdc apr 25 calls when the stock was 20 a winning move. Sure, it could go to 40 and your 3/4 investment goes to 15....thats the long short. I bet the bets I can win. Regards, Steve@yamner.com yamner.com