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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Michael Bakunin who wrote (12053)	7/27/1998 5:20:00 PM
From: JOHN CHEN	Read Replies (2) \| Respond to of 18691

Today's rally reminds me of the rally after the October crash last year; the generals are strong yet the troops are weak. This 90 point plus rally is going to turn out to be a sucker rally. The internals are terrible with more than 350 stocks hit new low and only a handful hit new high. Unless the internals improve, the rally will run out of steam completely.

To: Michael Bakunin who wrote (12053)	7/27/1998 5:35:00 PM
From: space cadet	Respond to of 18691

Michael, you've spent too much time reading books on options. Only in some textbook are covered puts the same as shorting calls. In the real world there are considerable differences. Also transaction costs are generally not a huge factor in the real world. And selling short has a much much lower transaction cost than buying or selling an option so that in actuality the transaction costs are not that different probably. However, selling calls is not a bad strategy on the internet stocks if you think they will sink. I'd much rather do that than buy a put. One nice thing about covered puts/calls is that if the market goes against your stock position you can cover your options at a cheaper price than you paid and wait for your stock position to recover. To some extent it's a matter of individual taste whether you want to do covered puts or short calls. Also the margin requirements may be different.