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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (25960)	9/1/1998 10:28:00 AM
From: James F. Hopkins	Read Replies (2) \| Respond to of 94695

Hi Bill; I just did a privet to Monty on them, the Big Arb boys are way out of my league, it takes much money, and very good connections. Money makes money in that game, Go to Vegas some time, and be sure to look for the exclusive card rooms, people like me can't even make the annie on one game. If one wants to understand the option game, they need motives that go beyond playing as just a buyer, other wise they miss the fact of who has the real edge, becoming a mullet in in a pool full of sharks, and most get in over their head. Can you write uncovered calls, do you have the clout it takes to short 100,000 shares of MSFT and at the same time write 1000 contracts of puts to close the short with, if so you could be a small player. Also if the market reverses can you cover the shorts go long the same amount and write the calls all in just a few moments. ? Do you know how may hedge funds there are that require at least a $1,000,000 before they will even let you in the door, have you ever seen what they call a "war" room ? Well I'v looked at that stuff but I don't qualify. <G> I have wrote both puts and calls & at times on the same stock, but I'm such a small player that expenses eat me up. Believe me the Big Boys never buy an option they write back unless it gets dirt cheap, and most often not even then. They are writing both ends of the play, and shorting, buying or selling the underlying issue all in one motion. They want the premium and know how to capture it, & they roll up or down on the issues that trade a lot. ie Dell & INTC buying back the cheap ones and selling the high ones as the market moves. They can stay market neutral, all they need to beat the market are the premiums. You can arb to them but they are already covered, other than that you have to sell any option you buy to some other mullet who thinks he is getting a bargain. Buyers are for the most part in a third market when it comes to selling what they bought. That's why I'm so cautious about buying, ( favor leaps ) , want the strike to have a lot of OI , and pass my pain test. Jim