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Pastimes : Rules We Can Learn From -- Ignore unavailable to you. Want to Upgrade?

To: Caroline who wrote (12)	4/26/1998 9:56:00 PM
From: Dennis J.	Read Replies (2) \| Respond to of 109

Option Rule: Buy time and buy in the money. Hi Caroline. Nice rules. << buy 3 or more months out >> I go further out, usually 4-6 months, and one strike ITM. Costs more on the surface, but improves your success ratio on trades. (Example: Owned Sep 45 puts on TECD when stock was 37, it ran to 48 on an acquisition, but still got half my investment back. Both time and ITM helped here.) << On double, sell half >> You own a proxy on the stock. If you like the stock, hold the option and watch it grow. Holding to expiration is good if you have a trending stock. Check how many of your quick option trades were actually higher at expiration. If an option rises above twice your strike price, you can exercise it and borrow the strike payment on margin. Then you can hold for long-term capital gains, or whatever. Good luck Caroline. Any more rules? //Dennis