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To: drsvelte who wrote (2343)	8/31/1998 8:47:00 PM
From: Broken_Clock	Read Replies (1) \| Respond to of 14427

Interesting...."cash will be accumulating and, sooner or later, it will go somewhere" When asked about this very question on NBR the other night, an "astute" market maven replied..."The cash just vanishes." The question was more specifically, "What happens to the money when it is lost like with the Russian devaluation?" doc...it's a balloon...it's just air. You see, the US$ is just a facade. At one point the German mark was better for starting fires than buying anything. It's only paper. Just ask any Russian, Indonesian, Thai, etc. how "good" their paper is. Here's the "secret" IMO Message 5637185

To: drsvelte who wrote (2343)	8/31/1998 9:18:00 PM
From: Alias Shrugged	Respond to of 14427

From November through May, I seemed to get beat up going long or short.<g> For the past 3-4 months, though, in my trading account, I don't put on sizable positions without hedging. Running hedged positions allows me to hold overnight, over the weekend. This strategy fails if the target stocks move very little. But, uh, I think it is sufficiently volatile for this strategy (of course I could still screw up the execution!). This strategy also ends up with lots of stranded puts and calls. Sometimes, I try to leg into the position, putting on the inexpensive side first (buy out of the money calls or puts), then laying out the bucks if the stock has moved in favor of the first leg. Lately (past month), I am setting up both sides at the same time, and maybe adding to the positions later, especially after extreme moves. On long puts or calls, I use several strikes, so that I can harvest profits when the stock moves my way by selling the more-in-the-money positions. For instance, with WMT at 64, buy puts - the 70s and the 60s (and the 55s too if you are feeling wild). This gives you flexibilty in profit taking. I try to hedge a large number of OTM or slight ITM options versus a smaller number of deeply ITM options (or sometimes stock){for instance, with say CPQ at 30, running 40 long 30 calls versus 2,000 shares short}. Extreme moves provide opportunities for you to create cheap leveraging positions. If the market smashes down hard, buying some OTM calls will allow you (if the stock recovers a little) to buy a smaller number of deep ITM puts or sell a smaller number of deep ITM calls. Holding hedged positions with long puts makes it easier for me, when the opportunity presents itself, to take the risk of buying the calls. Good Luck to All Mike