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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (15272)	3/26/1998 10:19:00 PM
From: James F. Hopkins	Read Replies (3) \| Respond to of 94695

Bill; Do you think any of the bears on this thread have made 30% since Feb 1st ?, And managed to get it off the table too.. I got very lucky last week.. and it was luck but that luck would not have happened and could not have happened had I followed the bearish nature of this thread. The luck part turned out to be some deep in the money calls..not just that they went up..( they were adjusted calls from a split ..were I thought I had just bought 20 contracts..they had a multipier in them of 2.5 x 1 and I had unknowingly bought 50 ) this when it funded jamed me into margin ..and I didn't understand the multipier. I called the broker as I thought it was a computer glitch..he explained what I had done..( damm good thing I had picked some good ones ) as it was they were up 19% and I took the profit. -) Thank you "Compaq"...for 19% from the 17th. Guess I should thank all the bears too..as they made it happen. Jim ---------------------- Calls vs Puts.. For the most part the premium is higher on puts than calls, I suppose not always but for the most part. Put's represent a more bearish or short nature..calls a more conservative hedge..but like a stock they have monmetum..and they skew fast if the stock gets momentum.. The put buyer often sees the market or stock going down and runs to buy a put..( it's the inverse of some one momentum buying a stock up but worse )..as that put is running up in price often even faster than the stock is falling. ------------------- But the call..it starts droping..it gets even more cheaper to buy, and if one buys it out far enough and is even half good at picking the bottom he gets the call dirt cheap. And unless a compleat bear market sets in..that stock will recover ..and as it starts up then the call skews up even faster. -------------------- In short most bear put buyers are doing the same thing they think is silly for the bulls to do in a bull market.. they chase and pay more for the puts, yet stocks have a limited down side..as one may go to zero..but for every one that does there will be at least two that more than double in price, in short all things even calls give more up side potenual for profit than puts do on the down side..in addition they they are often cheaper. And can be got at a bargain if a stock has taken a hit..were I find that such things as AOL or Yhoo puts do not get cheaper ( premium wise ) as the stock goes up, heck so many people start betting aginst them that the put premiums get out of sight..but they buy them..and buy them, with zeal and with the same frenzy, the longs use on the stocks that they can't understand they use buying puts or going short.. mainwhile the bottomfisher gets the edge..and does what the other two are so afaid of, he buys cheap stuff, including calls. He cathes the falling knives, were he may get nicked a time or two at least he don't get a rocket up his butt.., and with some pratice can do OK ..not because he is smart, but because the market gives him a natrual edge. It's built in to the market thanks to human nature. Calls make more money than puts..all things equal, not just because the market goes up more than down..the bears actually help him..and make the calls chaeper than they would other wise be. Jim

To: William H Huebl who wrote (15272)	3/26/1998 10:45:00 PM
From: donald sew	Read Replies (1) \| Respond to of 94695

Bill, At this time Im going with a 2.5%-5% pullback, which really isnt that much and is reasonable, at least for now. Lots of stuff happening next week. Economic reports are starting to come in worse than expected. Commodities are going up (CRB, GOLD). OPEC has there meeting on Monday. Greenspan on Tuesday - he wont increase rates but what happens just if he says something that the market does not like. I am not all that sure that there is that much money on the sidelines as it was in previous weeks. Seeya