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To: put2rich who wrote (39357)	9/29/1998 2:34:00 PM
From: Sun Tzu	Respond to of 53903

The short term upside is 16 and the down side is ~11. Seeing how the market is reacting to the Fed, I just delayed a trade buying the stock and selling Nov 15 calls for the total cost of 11 3/4. So my upside is ~28% and the down side is ~7% (if I am right). A 4:1 or better risk reward ratio is what I strive for and I set my exits at 1/3 of the rewards. So I'd be out of the stock and leave the option naked if TDFX drops to 10.5. I intend to do this trade this week, but getting a better entry point always helps. I will be going over this in more detail over in the AoI thread. Good luck, Sun Tzu P.S at this price I'm selling the options at the implied volatility of 96~106. Not a bad deal IMO.