Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Advanced Option Strategies -- Ignore unavailable to you. Want to Upgrade?

To: Vol who wrote (26)	7/9/1998 1:24:00 AM
From: Joe Waynick	Read Replies (1) \| Respond to of 355

Volunteer writes: >>> CSCO falls back 15% to 79. Exactly how would you "break even?" <<< There are a number of ways to protect yourself. Consider these ideas if I'm assigned CSCO on July 17th: 1. Stk tanks to $80 the next day. The easiest thing to do is write ITM LEAPs, to get out with B/E. Don't forget to factor in commissions and margin interest costs. 2. Write OTM CALLs every month until B/E on position held. 3. I could average down my position by doubling up on the stk and writing twice as many CALLs at a lower strike to get out faster at B/E. 4. Systematic Write a straddle that will get me out in one or two months at a higher strike if the stk rebounds quickly. It will also double me up if it falls more, but I now have three preemies. I could go on, but I think you get the idea. Check out McMillan and The Options Institute for many repair actions. If you NEVER accept a losing trade then the worst thing that can happen to you at the end of the year is you'll break even. That's better than losing in my book.