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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: SecularBull who wrote (112167)	3/25/1999 11:03:00 AM
From: PAL	Read Replies (1) \| Respond to of 176387

LoD: As Don said in his previous post, you don't have to roll it on the same stock. Let us just say you have May50 put on XYZ (I am not going to use Dell as an example). It becomes deep in the money because XYZ is almost bankrupt. The value of the puts is approaching the strike price. You can sell LEAP Puts Jan01/150 CMGI, to generate cash to buy back the put on XYZ (while it still has time premium). 1. You declare a loss on your Schedule D for that XYZ option (you need that anyway, especially in your case VBG) 2. Your cash account at least remains the same (generate more cah from CMGI to cover XYZ) 3. Now this is a great country or what? Remember the 2 rules from edamo. The stock must be a dynamic stock (like Dell, MSFT etc). Good Luck Paul

To: SecularBull who wrote (112167)	3/25/1999 12:48:00 PM
From: Don Martini	Read Replies (2) \| Respond to of 176387

LONGonDELL asked: "What if the stock stumbled and never recovered?" You're in a better position with the options, since when a stock falls $10 the put will only change $5-6 unless it's quite close to Xday. You can close options any time. I doubt you would hold a stock that fell from 35 to 2 [Vivus]. If you're on a down elevator no need to go all the way to the basement. Remember that you can roll out a losing contract into another stock, your dollars don't know what company is named on your confirmation ticket when you trade, and your broker doesn't care. It's a dollar game, pure and simple, the challenge: to keep the option premium you received. Consider: Stock is at 100 July puts and calls are each 15 You buy the call, your breakeven point is 115 I sell the put, my breakeven is 85 From the first minute I'm 30 ahead of you If the stock doesn't budge you lose all, I make 15. I can also roll out the short put forever, each time making a gain. This takes away time pressure, I don't have a deadline as does a call buyer. Try rolling out long calls, it's complicated. An account I opened for option trading in June 97 is up 435% Not incredibly good, but not too bad, either. I'm short some Leap puts that are $85 under the market price, veery nice! I make lots of mistakes, learn every day. My technique is better than I am as a trader. This fits my personality, but makes some others uncomfortable, all styles of trading when properly executed can be very profitable. I seldom do large single trades, usually 10-20 contracts, select many expiration dates and several strikes. And I can always sell some calls to sweeten the pot, a straddle, if I don't think the stock will jump too high, but this is the greatest area of risk, and should only be done if the call side is covered. Have enjoyed & profited from your posts for 2 years, Long! Thank you, and Happy Trading! Don