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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Kevin Podsiadlik who wrote (15164)	11/7/1998 10:55:00 PM
From: Vol	Respond to of 18691

Never said I preferred anything. Just pointing out a fact. Actually selling deep ITM naked calls is much more akin to shorting than buying puts. Plus, the premies on many of these stocks are killer. You'd need the underlying to drop more than 10% just to make a profit on some at the money puts. Now I could see deep ITM puts - less extrinsic value to pay for. Many ways to skin a cat, or Geron, for that matter. Vol

To: Kevin Podsiadlik who wrote (15164)	11/9/1998 11:08:00 AM
From: Marconi	Read Replies (1) \| Respond to of 18691

Hello Mr. Podsiadlik: Just pointing out that there is an alternative to shorting, namely selling calls. Why would you ever prefer that to buying puts? I sell naked calls if I have a strong expectation the stock is going not much higher, has the possibility to collapse, but the timing of a collapse is long overdue and unpredictably. Best regards, m Additional thought: AMZN would be an example. This is a month by month consideration for me. I am synthetically short AMZN longer term but with a smaller position than month to month considerations. The goal of the month to month is positioning for a likelihood of realizing $5-20K in premiums by going naked up to 20 out of the money November calls. Pieces are coming into place for AMZN that I feel business-wise, unless major changes are made, spell negative margins for AMZN and and increasingly negative net worth for the foreseeable future. Ingram may reasonably alter Amazon's favorable credit terms, differentially to a going concern as Barnes & Noble. Walmart might obtain an injunction to prevent Amazon from use of Walmart trade secrets for inventory management and coordination of orders. Although the public seems to have learned little in the last correction, at some point reason may come to prevail on the AMZN mania. Both shares issued and float are materially increasing. Insiders are selling sufficiently to far in excess take care of their earthly needs for life--an apparent change in internal policy at AMZN where only minor amounts of options were cashed in previously, and where the AMZN had the unusual options term of prior notice to the company before exercise, and the company's right to buy back the options at original issue cost (possibly only on termination), but effectively a very potent policing tool AMZN brass could use to keep 30M shares from entering the float. I could not predict the timing of the downside. But it appears to me that recently 115 was an area of peak, and 130 was another area of peak in AMZN pricing. As Mr. Babb has opined and I agree, there is a significant prospect for those who are long AMZN overnight to find the next morning the price is less than half the previous trading day's close. It is exceedingly difficult to predict such a burst of the AMZN bubble. It would be kindest to have the issue erode over time, but there is no guarantee that will be the path taken.