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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Northern Cougar who wrote (22758)	1/22/1999 2:15:00 PM
From: Jenna	Read Replies (2) \| Respond to of 120523

Northern, I used to be the most successful option player around. I got calls from the accounting department and the vice presidents of 2 brokerages (this was back in 1997) wondering how I did it. I would make 6-8k on a normal day. I once called my husband to come home from work after I had a 5 bagger on CDG grossing me 17k in one day on a 5 week option trade. That changed so abruptly before I knew what hit me on October 28, 1997.. My 26 option positions that were 35k worth of options were killed in one day. I learned the hard way that my strategies only worked in an 'up' market and were not really tested in a sudden and severe down market. I thought I was 'good' when in reality I was only lucky. I had to sell at a loss because I knew the next day would be even worse and it was. My options friends were wiped out because they were holding 75-100k worth of options and these were not multi-millionares either.. One lost his home equity loan. That was a year's salary gone in one day and as you can see I wasn't a highly paid professional. I have since changed my option habits drastically.. I rarely hold options about 5 option positions a month is quite enough for me now. I only buy options in companies that I have traded dozens of times, trade in fast markets and can get out of quickly. Options don't open in the morning as quickly as the stock does. I have sat with gap ups that have turned into break evens waiting to dump a good options (AVEI). It's just the way the options trade, no one is to blame. Now my strategies are changed to work in down markets as well as up markets. I did not even notice the market was down today according to my trades or the rest of the week for that matter.. My gains are less than in 1997 but it is safer to trade the new way.. with good stop losses and risk management techniques I've since adopted. If you can buy the stock, buy the stock. In these volatile markets you have a better chance of making back the money since options have become more expensive especially in the internet sector and I feel that they decay quicker as well. I did have MSPG options and index options (those are pretty decent, probably the best options I've done since that fateful day in October were index options) and now I have GTW February calls as well but perhaps one more option position in January and that's it.