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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: CENTrader who wrote (3113)	9/3/1998 7:37:00 AM
From: Nemer	Read Replies (2) \| Respond to of 44573

Bill --- When TT said he "sold short" OEX calls that meant that he sold them naked. ----- here are the only 4 actions possible concerning options ..... and the most common reasoning behind .... 1) buy calls ----- bull 2) sell calls ------bear 3) buy puts ---- bear 4) sell puts ----- bull of course there are many methods that bring into play the usage of several and even all of the above at the same time or other manners of action ....... but, normally, the 4 simple actions are done for the above reasons.... I can recco that you go to the Chicago Board and find out a great deal more than what I've just outlined ...... they have a superb education dept ....... also, I don't intend this to be demeaning to you in any way ......... I'm just trying to help out a tad bit ....... Regards ---- Nemer

To: CENTrader who wrote (3113)	9/3/1998 9:37:00 AM
From: Tom Trader	Respond to of 44573

>>How do you "sell short" OEX calls?? I means that I sold calls that I did not own in anticipation of a market decline. It is a strategy that will make me money as long as the market decline or at least does not go up. I cannot make more than the premium that I collected when I sold the calls but given that the premiums are so rich on these index options, that is a lot of money. The downside is that my risk is in theory unlimited and the potential upside is limited. Also the margin requirement for selling naked options is rather substantial. >>Do you mean you bought OEX puts? No--that is the way to play it if one thinks that the market is headed a lot lower and one is nimble enough to bail before it recovers. Hope that this answers your questions, Bill