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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Jerry Olson who wrote (22164)	12/29/1998 3:37:00 AM
From: IQBAL LATIF	Read Replies (3) \| Respond to of 50167

OJ-- I will see my levels on the straddles I have established, first the cost is real low as one can leg out of the short part as I have done as the market has been moving higher, second I am long puts now at as close as 1220-- whereas the SOX puts of 290 I sold as hedge are worth very little. I am looking at this market and establishing some key positions on mid caps slow and steady on the other hand the DOT.X and Yahoo and Amzn also are good play to establish downside move trade.. I would like to get out of the positions if BKX and transportation start moving BKX 815 break will decisively take market higher so for me the prescription is not a short but a mix of most attractive opportunities right now it is long in mid caps, outside money calls on key stocks like LU MSFT NOK.A CSCO and put spreads- like selling Feb 1150 to buy Feb 1200 1.5 to 1, when market higher to 1255 or 1260 leg out of 1150 short put which is 1.5 times higher in number your net cost is greatly reduced and you have position right at the market within 5% and your puts are in the money, this is the best way to establish a strategy of protection in a market which is relentlessly going forward. The most interesting possibility is that you can easily sell 12% -15% lower puts on individual stocks like CSCO INTC MSFT in Feb collecting additional premiums, now on one hand your puts will come in the money with a 5% move on SPH on the other although put premiums may increase on individual stocks the possibility of reversal at 1150 is equally potent, one may leg out of long puts until Feb at 1170 level EXPECTING A REVERSAL and let the individual stocks put expire or take the delivery at 12 to 15% lower from where the market is right now, ofcourse if the market keeps going higher you just pocket the difference on individual puts and your wasted long puts on SPH. Like 250,000 $ worth of SPH Feb 1220 at 27$ 3% lower from the market - may cost 7000 $ Now 12%-15% NOK or MSFT 130 or 110 for 20 or 25 puts depending on the price of the stock for Feb will give you a premium of nearly 5600 $.. In my opinion your SPH comes in the money immeidately but NOK.A to reach 110 would need SPH to be at 1148 area, where your long SPH at 1220 could be theoritically as high as 70$ that is 17500$ where NOK.A puts will just come in the money- you will collect 22,600$ of pre on puts and your outlay would be 7000$, at 110 you will own NOK.A 2000 shares if you deduct the net premiums taken in the cost may be much lower this is my definition of a defensive play and a short, anything else where market is not prepared to pay for my strategy I just don't like it.