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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: SMALL FRY who wrote (40074)	5/14/1999 1:10:00 AM
From: Jenna	Read Replies (1) \| Respond to of 120523

Straddles, I used to do them all the time with the drillers. I would lose about 2-3 option points (30%) on one and make a double or triple bagger on the other. But the the figuring got to be difficult, but actually it was the beginning of the end of the drilling sector at that time. I was not able to get into INKT puts, I was surprised at the lack of volume.. but ATHM and AMZN were easy. Okay let's say you buy 5 puts on QLGC for $4 and 5 calls on QLGC for $5 or 5 1/2. The next day QLGC gaps up 18 points.. you lose your entire 5 puts..$2,000 gone (this time you can't get back 30 or 40% because they are wiped out..) okay so I made 250% on my QLGC calls that would mean roughly you make $6,875.. minus the $2,000 which leaves $4,875.. But I bought 10 contracts I don't have the portfolio transactions open now but say they were 5 or 6.. I do remember I sold for 250% and that would be roughly $12,500. This is an extreme example because most calls don't appreciate that much overnight. And you also have to figure how much the stock would have to go up and calculate the results for both the call and the put. The way I did it is I got into both puts this afternoon. I could have sold through the close and come out with about 3.5k from both AMZN and ATHM. I stopped doing it because I don't hold more than 20% of stocks through earnings lately.. Maybe its just our disparate styles, but I just look for buy triggers on stocks that I 'expect' to move up and its easier for me to ignore the others rather than buy both the put and the call. I got into GMST 3 times since last Thursday...just long.. and when AMZN was up only about 9/16 and starting to move negative I looked for a negative breakout and I picked up the puts. I think the NAZ was still up about 6 points when I got the puts but with ATHM NAZ was already down 2. By the end of the day the NAZ was down 24 so I'm not sure where the calls come in.. For the gap up in the morning? Also I think i have very good timing in entering puts, but my timing in exiting them are sometimes indecisive and done more as an escape rather than a carefully thought out exit. That is basically because I'm intrinsically bullish on the net stocks and I see almost every small reversal of a downtrend as a trigger to escape because the nets can turn on a dime. Invariably I leave 40-50% or more on the table. But for me that's enough.