cline@dartvax.UUCP (Greg Cline) (02/26/85)
I'd appreciate any hints and/or advice about getting into options. While
Tucker Anthony and other firms try to convince the investor that
options can be relatively safe, I'm not sure I buy it. Is it better to
using options speculatively or safely (i.e. covered calls)? What
methods should the beginner attempt (straddles, hedges)? And what
about those special opportunites, like when DEC or Data General
stock crashes-- can one profit using options? Post to net if
this is of general interest to investors.
Greg Cline
Graduate Computer and Information Science
Dartmouth College
decvax!dartvax!clinesuhre@trwrba.UUCP (Maurice E. Suhre) (02/28/85)
Take a sum of money and leave it in the money market. Take
the interest received and use it for your options investments/speculations.
That way, you won't go broke when you are wrong.
My broker says that when the news is bad, buy on the fourth
day. I looked at Data General options then and didn't like
them. I was probably wrong!
The main thing to remember is that an option is a wasting asset.
If you don't sell and cut your losses, they will continue to mount
until they reach 100% for an out-of-the-money option. Stocks
usually fall and finally bottom out. The other thing is that
buying out-of-the-money options just because they are cheap
usually results in all loss. However, you may strike it big.
They are "long shots".
Maurice
{decvax,sdcrdcf,hplabs,ucbvax}!trwrb!suhre