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

To: miklosh who wrote (34605)	10/27/1998 8:30:00 PM
From: Knighty Tin	Respond to of 132070

Mik, I don't really like buying straddles, though I have occasionally done it. I certainly prefer it to selling straddles. But, my philosophy is that you should have a strong opinion on a stock before you do something in the market. Most people I know who buy straddles are forced to take profits too soon by the nagging fear of that big double premium monkey on their back. And the whole idea about buying options is to make a lot of money with little risk. Let me suggest an alternative that is more like paired trading. Buy a call on one volatile stock and a put on another. For example, rather than buying a straddle on AOL, buy a call on AOL and a put on Yahoo, or vice versus, depending upon what you think of their relative valuations. Or a call on Dell and a put on IBM. A call on Pfizer and a put on Warner-Lambert. I would still rather only go one way on most industries or sectors, but this is preferable to playing Acey-Deucey with one stock, IMHO. I often play both long calls and long puts, but in entirely different areas. For example, a put on dead meat Micron Tech and a call on undervalued Ligand Pharmaceuticals. MB