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Microcap & Penny Stocks : Tonto and Janice Teach Investing -- Ignore unavailable to you. Want to Upgrade?

To: Janice Shell who wrote (154)	3/28/1999 6:16:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 302

Let's face it: the BEST way to make money in options is to do naked writes. As long as you don't make an Awful Mistake... there is an old saying among market makers 'options are to be sold, not bought'. Naked writes are the way to go if one understands what they are doing. One way to help reduce the risk of writing options is to take a portfolio approach. Select a diverse group of stocks that you can follow and learn their rhythms. Try to select a group that includes both stocks you like and those you might consider shorting. Write both puts and calls if possible. If you diverse your option portfolio you will reduce the odds of taking a really bad hit and increase your chances of generating good returns.

To: Janice Shell who wrote (154)	3/29/1999 11:23:00 AM
From: Sam	Read Replies (2) \| Respond to of 302

"Let's face it: the BEST way to make money in options is to do naked writes. As long as you don't make an Awful Mistake..." I've known perhaps a dozen people who work at the CBOE and who made a fortune doing naked writes, over a period of years. Then they made their Awful Mistake, and lost it all plus some in just a few days, weeks, sometimes a month or two. The Awful Mistake is nearly impossible to avoid over a period of years, especially in this kind of market. Mainly because often they aren't even "mistakes", except in the sense that the market went against you. The market "shouldn't" have gone against you, Mr. Market was outlandish, but then, so it is. As someone, I think Henry, has said, Mr. Market can remain "irrational" far longer than you can stay solvent.