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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: James C. Mc Gowan who wrote (32442)	9/9/1998 5:33:00 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

James, You had me scared with that Mr. Burke bit. Thought you had a subpoena or a pregnant daughter. <G> I love puts on individual stocks, like somewhat less industry indices, and can barely tolerate broad index puts like OEX. I think you get much more bang for your buck out of individual names if you know those companies well and you can diversify (a minimum of 5 and preferably 12 individual names). First, read about my 90/10 system of allocating money to long options on The Internet Financial Connection. You can get there from the SI Home Page. Click on the archives and look for the title "Tech Stock Speculating While Wearing a Belt and Suspenders." Though that was about calls, the technique is the same for puts. I think the American markets are the most overpriced and European markets somewhat less overpriced. Nearly everywhere else in the world is dirt cheap. So, I wouldn't be buying index puts on foreign markets unless they were mostly in Europe. I would recommend puts on American stocks and buying the most overpriced groups, not the weakest groups. These would include retailers (WMT, HD, BBY), Dopers (WLA, DRG), still bloated tech stocks (LLTC, MXIM, Xlnx), media/internet fluff (CCU, IIX) and, on big bounces like yesterday, banks and brokers. The financial scamsters are down a lot, but they have further to go. I buy puts on up days and sell them on down days as a general rule. I buy out of the money puts, generally one or two strike prices, and 4-6 months out. That seems to be the sweet spot, though I have purchased a lot of two month puts in the past. If you have to go with OEX or some other index, definitely wait until an up day and then go out about 3 months. Those dogs are pricey. Good Luck, MB