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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: j g cordes who wrote (13554)	8/28/1998 9:16:00 PM
From: Jenna	Read Replies (1) \| Respond to of 120523

5 of my Personal Strategies for Buying Options... I've been getting more e-mail on options. Here is a word of caution here. you can't buy too many calls. Traders have asked me again why I don't buy 100 puts instead of 10. 1) When buying call options only buy 1 or 2 calls for each 100 shares that you would have purchased otherwise. So since I usually buy 1,000 shares of stock, I buy 10 calls. On the Puts of the internet sector I opted for 20 calls. 2) Only buy calls on stocks that you expect will have high price advances and have had so historically, or are very volatile with huge intraday spread, the profits will be much greater than the price of the premium (i.e. AMZN, AOL, AMGN, YHOO, DELL,CSCO etc) 3)Do NOT rely on momentum alone when buying options. The option strategies mentioned here work best with stocks that are above their 50 day moving average and fundamentally strong, or are beaten down and fundamentally strong. I usually buy options of companies that I have in my long term portfolio which today includes stocks in the telecommunications, satellite, Retail and Drug sectors (I still have MSFT, and INTC long term) 4) Buy options in stocks that you can go on a short vacation and not worry.. This must be now amended because even if you own stocks like MSFT, CSCO, LU, KO and GE, be prepared to either postpone your vacation until things are more stable or watch the tick intraday.. It's worth every minute of it! You'll have an even better vacation later on. 5) Buy options (calls/puts) on these companies: AOL,AMZN,YHOO,XCIT, BBY, CSCO, ASND, COMS, DH, WMT, DELL, GPS, PFE, INTC, MSFT.. These trade in a fast market and there is always enough volume to assure you of a quick exit and entry level.

To: j g cordes who wrote (13554)	8/28/1998 9:38:00 PM
From: Jenna	Read Replies (2) \| Respond to of 120523

My take on this mess for what its worth... The DOW fell 357 points Thursday, August 27,1998, to about the same level as a lower trend-line that began in late 1994. The volume of the selling was very, very heavy. Declining issues on the NYSE swamped advances by about 10:1. Why did this happen. Well it's the crisis of the world's financial systems, and the question of whether Japan will really be able to reform its banking system. Banks exposed to investments with Russia are recoiling from the downswing. Stocks were down 3% in Japan. In Germany France and Italy it was down 4% and in Latin America 5%. The reason I'm so interested in the S&P 500 and S&P 100 put options is that a large portion of U.S. profits from these large cap stocks come from foreign countries. They are huge companies. All these aside now you have the Russian ruble destroyed and this will lead to a possible recurrence of that country espousing communism. After all under the communist regime everyone had jobs, pretty good health care and most of all they had food. Now having lived in Israel for 12 years I remember the fear of having such a communist system. The reason Israels economy can't go forward like that of Switzerland etc is because of the huge debt they have in defence. Now if the cold war resumes, Europe would have to spend lots more on military preparedness. This would have a domino effect on America. So the problems in Russia have a much more far reaching effect.. It's tentacles reach as far all Europe and Asia. Now you have worries about China devaluating their currency as well. So you all think we have reached a bottom. So this 'crash' was letting out some pressure from this overblown blimp of a market. Do you want to be a bargain hunter with these odds?. Mutual funds are being redeemed at record rates in the last 8 years. I don't mean to be pessimistic but for me having lived half my life in Israel and Europe, I'm very used to having real fears and living in reality. Americans have been living with this complacency and in luxury from the bull market and for quite while. I'm also guilty of this same complacency and that hit me like a rock in 1997. I know you all expect a nice rebound on Monday and then on Labor Day and I also expect some rally to take place. But I won't go long on stocks because they look like bargains or because people now are all saying its a bottom and buy the techs etc. I will be continue to be skeptical, daytrade if I have to or swing trade for 1-2 days. Simply put, it works for me. I bought more puts this morning. I made just as much this last week as I've made when the market was up 130 points no more and no less. The point is don't be pressured to get into the market for the short/intermediate trade just yet. I see the traders reactions and I'm concerned it is way to soon. Trade with prudence, don't be cajoled into going long becasue that worked fine for you 1 year ago. You might have to change your trading strategies because they might not work this time.