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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Bob who wrote (23229)	8/23/1998 11:33:00 PM
From: Paul V.	Read Replies (1) \| Respond to of 70976

Dr. Bob, >If it struggles, as expected, you can keep selling calls until you think it's ready to run, and then you already have the stock, at a lower basis than where you bought it, and you can buy back your calls, if necessary, to clear the road for the eventual runup.< My problem is, I have seen many individuals get caught trying to time AMAT. It zigs when you think it will zag and zags when you think it will zig. That is why I am a long term investor with AMAT and let the DW sector percentile and statistics drive my selling. With the addition feedback we get from this and other sites at least we can come up hopeful better strategies. For your information this past week we just broke through the Bull Resistance line which was at $31 when it hit $30. The downturn also broke a double bottom, a bad sign. IMO, I expect the stock to continue to go down. Using DW estimation technique off the recent high of $37 I estimate a low of $25. Then, again it could go lower. Since the highs of $39 in April and May we have had lower highs and now have broke out lower. But we all have been wrong in the past. Naturally, the above is only my opinions and the data which I have reviewed from the Dorsey Wright site. Readers are reminded the old saving, "caveat emptor (buyer/reader beware)." Paul V.

To: Dr. Bob who wrote (23229)	8/24/1998 12:31:00 PM
From: Robert O	Read Replies (1) \| Respond to of 70976

Dr. Bob I think your concept here is a pretty good "call." (Uggg) My concerns are that the pricing of many options is somewhat unfair but it's not readily testable by myself. More interesting is a conversation I had recently with a hedge fund trader: Me: Isn't it interesting that 90% of all options expire worthless (I borrowed this stat. from Ben's website and it's well founded elsewhere). Trader: True, but in absolute dollar terms watch out. Of the 10% that have value, many times option sellers will get hammered for much of the profit that had been accumulating using the selling option strategy. Consider the call seller who woke up one morning to find out that Chrysler was being bought out by Mercedes Benz. OUCH. Now, I realize you're talking about a covered call. For frequent traders out there can someone please let us know what the very worst possible outcome could be using Dr. Bob's strategy? I'm always naked <g> so have not fully considered the implications in real world application. I'm sure AMAT has full time players buying the underlying and playing the options...whadya say? Robert O