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

To: joe smith who wrote (19315)	5/28/1998 8:00:00 AM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 94695

Pakistan detonated two nuclear devices.

To: joe smith who wrote (19315)	5/28/1998 10:35:00 AM
From: James F. Hopkins	Read Replies (2) \| Respond to of 94695

Joe; I really haven't done much home work on index options, I was discouraged as each time I looked they had a lot of cost compared to the average option, for the limited amount of volatility they have it looks to me the bookies are taking to big a cut of the action , but as long as they have the demand I guess I can't blame them. On regular options as a general thing I look at just out of the money ( but I want a lot of open interest,) and in charting them I want to find were the volume shows me that I'm getting in at a big discount to what the vast majority paid for them ( that's the pain level test ) ..as then I know if the issues does move my way that particular option will likely have the largest percentage move my way..( it's the human nature aspect ). These are not easy to find and it takes a lot of work and digging. Don't believe even one tenth of what you read on SI about options, while there is some money in them it's hard very hard, and so many people get a little lucky at first and it just sets them up for huge losses that you hardly ever hear about. ----------------- Understand (1) if you are going to play options you need to at least be good at picking and trading stocks first..before you ever get started on options. If you cant trade an index like the SPY or MDY or move in and out of a no load index fund and make money you will not make it in options. ( while the profit is not a lot trading an index trust or fund the cost is far less and so is the risk ) and unless you know that you can dance in and out of these things, then index options will sooner or later clean your plate. (2) All things equal..going long has less risk than going short and offers more profit over time..people who can't see that are blind , so don't pay them a lot of mind. If you find someone who seems to focus on the short side all the time, or even more than the long side you better put up your guard, they either do not understand risk reward , or they are a hustler. Going long you have the edge of having time on your side, & calling a bottom is not as risky as calling a top. A stock can only go to zero while many of them more than double so all things equal about judgment that principle on going long gives you that much of an edge..the biggest mistakes come after we make a few hits and get convinced we are smarter than most of the money in the market. (3) The trend is your friend is a good saying, but seeing that trend before the rest of the market is not as easy as many seem to think it is. By the time the market gets convinced of the trend it will reverse. Good luck, Jim