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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: D VanSwol who wrote (6783)	2/5/1999 5:58:00 PM
From: OldAIMGuy	Read Replies (2) \| Respond to of 18928

Hi Dennis, I cancel any open Buy orders I have on a stock at the same price that I'm selling the Put contract. I don't want to double up my buying by mistake. The put replaces my AIM directed Buy. Upside is the premium I get paid, Downside is that I might have bought the shares cheaper on that day or that I won't ever get the shares and have to sit and watch the price climb away from my strike price. When you sell a PUT, you are in essence placing an order to buy shares at that contract price on or before the contract date. You're only assured that you'll get the shares if on the contract date the price is below your contract price. Otherwise you don't buy. My broker and I have this stuff worked out and our terms seem to work for us. I'm not sure I use the terms in the correct fashion, but it has usually worked for me. We have to have very high confidence levels in our companies to buy shares as the price falls. We also need to have lots of confidence to Sell PUT Contracts around our companies when prices are falling. We still have to depend on sound fundamentals. Best regards, Tom