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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (10)	3/9/1998 4:57:00 PM
From: Bilow	Read Replies (1) \| Respond to of 2578

Your advice is correct. I'm planning on keeping these options only for a couple of days. At most, say, a month. (giggle) DELL was 64 3/4 when I bought this morning. It rose during the day, then fell near the close. I put a market order in, and as usual, the MM got me in at a high price: 3 5/8. But they closed at 3 3/4 bid, so I'm doing okay. But that is a lot of time premium for a two week option. My experience with options is that even if you do manage to predict the movement and the direction and the time, you still don't make as much money as you expect due to the loss of time premium when an option goes from near the money to deep in the money. If I keep to expiration, DELL has to close at 61 3/8 for me to get my money back, and that is not terribly good odds. I had CPQ puts that did okay this past November. If there is a secret to surviving on puts in an mania market it has to be timing and avoiding greed. But anyone who buys a newspaper would have been able to see the reduction in ASP of boxes. The implication to the industry when it has already approached saturation of the US market is clear. CPQ in single digits, Dell in the teens. I'm going to start trading the market with a Nasdaq level 2 feed in April, and then I will be much more comfortable going short. That eliminates the time premium problem, the nasty spreads, high commissions, and the illiquidity of the options market. -- Carl