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

To: Patrick Slevin who wrote (38881)	4/10/1998 2:37:00 PM
From: Jay	Read Replies (1) \| Respond to of 58727

First, I'd like to thank Patrick, donald, David, and Nancy, who answered me. This interesting thread, while mostly technical, is such a hodgepodge of ideas, I thought I would throw in my two cents. The consensus is this: While betting on a stock run up after a positive announcement seems to work in a fast moving Bull market, caution should be exercised at other times. (Or better yet, at all times.) Thanks for your (more) expert advise; I will take it to heart. A follow-up question: What is the downside at other times? Say the market stayed flat after one had made the trade, could you not just exit at the end of the day, minus commissions? I understand each trade must be approached on it's own merit. Next: lisa asks me about a tactic I have used with some success. I have watched wonderful up trends get flattened by these damn sell programs. I've had positions that were just flying get clobber and head to negative territory quicker than I could stop out. (My worst case was INTC. Was THAT ever a lesson.) Instead of cursing my bad luck and wishing the perpetrators would be visited by a disgruntled postal worker, I've tried to figure how to take advantage of the situation. When one of these sell programs hits, if the market has been steadily up-trending to that point, I buy OEX calls after the drop. Maybe I have just been lucky, but the market seems to have some bounce, which I take advantage of for a quick day-trade. Downside: same could be said of this tactic as with first situation. Fast moving Bull market, etc. The other bad thing is another sell program coming along after the first one. That will kill a market for the day. Traders want nothing to do with it and go home. Market goes lower. Best to bail and go do something more relaxing like getting a spinal tap or root canal. Are there other (better) ways to deal with this? Forgive me, I have the feeling this has been discussed to death, but I haven't followed thread long enough. Point me there, and I'll read what has been posted. Finally, can someone recommend a good book on EW? Not knowing quite what to make of these predictions of disaster, my own defensive posture has been to buy both the OEX puts and calls. I'm ready for anything except nothing. If the market stays flat, I lose. Remember that old line, "What if they gave a war and no body came?" I'm wondering what if a mammoth correction happened and everyone was prepared? Odd thought. Jay