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

To: Tim O. who wrote (51127)	8/29/1998 5:31:00 PM
From: ViperChick Secret Agent 006.9	Read Replies (2) \| Respond to of 58727

Tim you are soooo funny.... I have had a VERRRRRY VERRRRRYYYY expensive education.... if you look at my example of that SPX option on Thurs and Fri...you can see why futures could give you a better return.... however, there is just something about that unlimited risk factor....our old buddy Nemer doesnt touch them either...probably because he got burned once... I am not trading index options at the moment because of the steep IV on them and I didnt get in when Don was whispering in my ear earlier this week... so I am waiting.... besides..as I have told several people in PM's...I have been in a funk over the last week or two..and that is not a time to make decisions on index options...or anything for that matter... The Tower of Abs promises to get me in gear though ;-))))))))))) I wish someone would come forward that has traded the options on the SPOOS...instead of the cash

To: Tim O. who wrote (51127)	8/29/1998 7:27:00 PM
From: AlanH	Respond to of 58727

Tim, here's another Internet Index to consider... GSTI Internet Index (GIN) as of July 31, 1998 AOL AMERICA ONLINE, INC. 27.13% ATHM ATHOME CORP 10.85% CHKPF CHECK POINT SOFTWARE 2.06% CMGI CMG INFORMATION SVC 3.37% EGRP ETRADE GROUP 2.47% NETA NETWORK ASSOCIATES 12.63% NSCP NETSCAPE 6.71% SDTI SECURITY DYNAMICS 1.28% SE STERLING COMMERCE 8.35% XCIT EXCITE, INC. 4.25% YHOO YAHOO! INC. 20.91% As you can see, AMZN is not in the pack but that's easily resolved. ($GIN was down 7.18% on 8/28, compared with 3.54% for NDX and 2.77% for COMPQ.) I agree that stock and index option prices are really* high (and subject to $VIX fluctuations). So for those of us unwilling to play futures, we're forced to either: pay higher premiums; or, spread (and suffering margin requirements which reduce ROR). Given the margin issue, Jenna may have the right approach in using stock options -- even if the premiums are high. You've mentioned OEX as an alternative to SPX. Currently, this has one of the highest IV's out there. One question to ask is: Do you feel that S&P100 will continue to outperform the broader market, or suffer from a "delayed reaction"? BTW, McMillan has recently highlighted that CBOE does not list OEX options 50pts otm. (My read is that it's more difficult for OEX writers to cover in a crash; of course, SPX options could be used as a hedge BUT we're talking about American v. Euro style contracts. Futures, anyone?) <g> Since $VIX has become such a hot topic on this thread, I'd recommend acquiring the most recent The Option Strategist newsletter [V16, #6]. Interesting reading. -Alan