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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: bede who wrote (50548)	7/10/1998 2:13:00 AM
From: Don Martini	Respond to of 176387

Bede, If you have 5 years trading experience contact Brown & Co, they give sharp executions and very low prices: 10 contracts for $30.00 or so. By all means use a discount broker, not Merrill Lynch, etc. Avoid First Union like poison ivy [Bank & Brokers] Each contract is for 100 shares, so an $8.00 option = $800/contract. You have to maintain a reserve when you sell puts, at Brown its 20% of the strike price plus the premium. The reserve goes up or down depending on how the option does. If your cash is low you may not be able to sell puts, only buy calls. To reduce risk think about using a Call covered by a Call strategy: Buy Aug/100 Calls: Bid 7.50/Ask 8.00 You bid 7.50 and get them SELL Aug/105 Calls Bid 5.50/Ask 5.87 You ask for $6.50, the stock fudges up a bit and you get it. Or, if the stock is running, wait a bit and maybe get $7.50 If its really running wait till about 2 days before expiration [Wednesday Morning] and sell the Call that's just above the price of the stock. This will give you all the appreciation above your call plus a few extra dollars. The stocks usually drop before X date, starting Wed PM or Thursday. Now you have a very low cost position: from .00 to $1.00 Maximum return: $5.00 less your net cost of 0 or $1; 80-100% profit. If you can sell puts: Sell the 8/100P, Buy the 8/100C for about the same: This gives you a zero cost position with unlimited upside potential. Or you may have to roll the puts out if the stock drops. Try Waterhouse. They do options, but keep careful records. Dell usually climbs the first 45-75 minutes, then drops for an hour or so, then climbs in the afternoon. Pick your timing. Best wishes, Bede! Don