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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: Jenna who wrote (37637)	4/30/1999 9:09:00 PM
From: DO$Kapital	Read Replies (1) \| Respond to of 120523

. <<<<AFter watching AOL and AMZN turn after earnings (pretty easily predicted which is why I went into puts)' and the two days of sever downdrafts we had, we should have taken profits today.>>>> You mean taken the PUT profits from AOL and AMZN today, correct?

To: Jenna who wrote (37637)	5/1/1999 9:20:00 AM
From: Rose K	Read Replies (1) \| Respond to of 120523

Thank you for the excellent instructions and tips on trading options. I traded the MFNX calls today, also. Actually, I found it to be a very good experience because it helped me to practice getting out on time. I bought the May 85s at 6 1/2. At one point the bid was at 7 but it didn't seem that there was any reason to sell because the 5 minute chart looked pretty good. [I'm finally learning to use the charts to get in and out of positions, thanks to Market Gems and the instructions I received on where to learn about technical analysis.] It even seemed to hold up when the sell-off began. Then suddenly, it just didn't seem to have the holding power. There was more selling happening than buying and the OBV fell significantly. I was ready to sell at 6 7/8, but by the time I put the order through I got 6 5/8. Enough to cover the commission and a little tiny bit extra. The reason that was so important to me is that in the past I would just let it ride and when the calls went down a point or two, I would bite my nails and pray and hope that the stock would come back to the level at which I had purchased them. Unfortunately, the time premium decayed as the days went by making it more difficult to recoup. It was so hard to accept a loss. Today I was happy that I got out before any serious money was lost. I didn't even feel bad when MFNX recovered at the end of the day. The calls were trading at 7 5/8 and 8 1/8. It could just as easily have gone the other way. I really want to learn to trade options well. They did me in last year and now I want repayment for that tuition. I'm still learning but I know that I will get this. I was thinking of trading OEX yesterday. Unfortunately, I left for about an hour around 1:30 and that was the time to enter the OEX puts. OEY QN went from about 9 at the high of the day to about 18 when the DOW was down 220. I think that you can't be too scattered or you miss the opportunities. The other miss I had yesterday was AOL. I bought the May 155 calls at 5 3/4 on Thursday afternoon and sold Friday morning at 9 1/8. I stopped paying attention to AOL because I was not expecting it to go below 142. I did not notice that it went to 134. [I have to learn how to put the alerts in.] I could have purchased those same calls for 4 3/4 Friday afternoon and sold into any strength on Monday. A few months ago I knew nothing about these strategies, when to buy and how crucial timing is with options. When I first started trading options, it was only one month after I had made my first trade ever. I had never even invested in the stock market long term before that. I certainly knew nothing about earnings, "whisper numbers," anticipatory upswing or anything else. I barely knew what puts and calls were. I knew that there was fundamental analysis and technical analysis, but I didn't know where to start. I was reading a few general stock market primers, including William O'Neil's stuff, but hadn't yet internalized any of it. I got the tip that Dell would do very well because they would have blow-out earnings. I bought calls (out of the money) at $4 two days before earnings announcement. The next day they were worth about $7 on the bid. Did I sell? No...I expected that I could get $12 or at least $10. Isn't that what all the other options traders were saying? They consistently made 200%, 300% or 400% percent. This was May of last year. Dell had excellent earnings, but they missed the "whisper" number. My calls were at $5 in the morning. Did I sell? No.... I was waiting for Dell to make a comeback. What happened?? I waited and waited and I waited so long that the calls expired worthless because there were only a few days until expiration. It was a very bitter experience, but I don't mind talking about it because I hope that others might be able to avoid making the same errors. Options are much more difficult to trade than stock, but I believe that they are one of the best ways to make money once you understand the "rules." I'm still learning. Thank you for the help, Jenna. I am doing much better since I became a Market Gems subscriber. Best wishes, Rose