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

To: robin 187 who wrote (58528)	8/17/1998 9:21:00 AM
From: tsyl	Read Replies (1) \| Respond to of 176387

Robin re: options.... I feel your pain, man. No joke. I bought 100 Sept 120's on July 27 for $10. Did I set stops? I essentially bought as the mkt was correcting. Like you, it was all my fault. No one elses. Ive been trading options over a year and had great success. Every person Ive taught to do options hits a great first trade - then gets spanked HARD. Key to options - limiting the losses. Brilliant , huh? If you have available funds, you can follow solid advice given by a more experienced trader than myself on this thread within the past three days. I dont have the post #. You got bad advice about Sept's calls.

To: robin 187 who wrote (58528)	8/17/1998 10:34:00 AM
From: SecularBull	Respond to of 176387

Robin, you've learned the hard way about trading options, but you have to be commended for being willing to consider pulling the rip-cord before you lose everything. I cannot tell you that the stock will be trading at 120 or more come September options expiration. In the past, I'd have been more willing to roll the dice, but with the recent (non-DELL specific) market volatility, it's hard to say how the market will react to whatever news is reported tomorrow. With that said: Owning the September 120s is a dice roll. You may hit (and probably not very big). You may lose everything you've invested. At least you don't own August calls. The questions you have to ask yourself are: Would I buy the September 120s today, and why or why not? You obviously already own them, but the purpose of this question is to confirm your resolve in sticking with them or bailing out. In my personal opinion, I think your broker gave you some very risky advice. It may pay off, but you may lose everything. Without knowing the full context of your discussions with him/her, I'd say the only one that's going to make money for sure is your broker. If you answered the question about the September 120s in the negative, then you might consider cutting your losses. It's up to you. I think you need to quit compounding the problem by trying to reverse your losses. It's like doubling your bet at black jack after you just lost a hand to try to win it back. If you're going to sell the Sept 120s, make that decision irrespective of how you intend to make your money back. Sell them, pocket the cash, and move on to better trading after you've had a chance to survey the climate. I have to go into a meeting, but as soon as I get out, I'll post some more thoughts to you about what I might do. I wouldn't own the Sept 120s, but that is also based on my philosophy of owning in-the-money calls. I like my capital too much to buy out-of-the-money calls. THIS IS NOT A RECOMMENDATION TO SELL YOUR SEPTEMBER 120s. THE DAMAGE IS DONE. CAN LESS DAMAGE BE DONE, OR UNDONE BY HOLDING THEM? YOU MUST DECIDE. More on that in a bit. Good luck to you. LoD

To: robin 187 who wrote (58528)	8/17/1998 11:20:00 AM
From: SecularBull	Read Replies (1) \| Respond to of 176387

Robin, back to options: In my last three years of trading options, I've made much more money than I've lost. But, I also have paid more for options by buying in-the-money calls and/or long term calls before the big upward moves in DELL. I rarely buy out-of-the-money calls, and only when they're long term (1 year or more). This means that, barring some calamity, my options always have value. You got burned here, because you bought too late into the upward move. You are also the victim of a richly valued market. Buying out-of-the-money calls in this scenario is a recipe for disaster. If I owned the Sept 120s, I'd split the difference between the options I'd like to own (say the Sept 100s) and those that I do. I'd sell the 120s, and use the proceeds to buy as many 100s as I could. My reasoning is that the 120s may expire worthless. You might try a straddle in which you sell naked Sept 120s, and use the proceeds to buy Sept 100s. If it goes past 120, you get called, but you can also use the 100s to satisfy the call (saying that you by enough 100s to cover the 120s). You're limited on the upside, but you may be able to recoup a big amount of the money you're in the hole. I would not be inclined to do this, however. It goes against my personal philosophy, but it may work well in your case. In any event, I'm sure that someone else on this thread may be able to better explain the latter strategy to you better than I. Regards, LoD