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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?


To: Elmer Flugum who wrote (49637)8/10/1998 10:36:00 PM
From: The Jedi  Read Replies (1) | Respond to of 58727
 
<<<A dramatically underused options strategy -- the sale of uncovered, or
naked, options -- yielded a return of 93.9% for my clients in 1997>>>

This sentence is true. The reason for dramatic underuse was the crash of 1987. Before that this was the most common option strategy used and taught by gurus. The market moved so fast that the stops triggered still resulted in massive losses specifically to institutional clients using this strategy on large scale.

Going naked resulted in over-exposure to them and failure of some.
-----Just another perspective.
Kiri



To: Elmer Flugum who wrote (49637)8/11/1998 9:18:00 AM
From: SJS  Respond to of 58727
 
Bear markets are great for this strategy. This is conceptually an interesting idea, but moving out far enough to be "safe" usually yields very little premium...

Regards,