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   Strategies & Market TrendsDJX (Dow Jones Ind. Avg. options)


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To: david siple who wrote (15)2/24/1998 5:13:00 PM
From: MJR
   of 33
 
You are correct.. the bid/ask will kill you unless there is a large move in the dow.. I generally load up with 20-40 contracts, so not all that large.. but large enough to overcome some of the difference. Because of this I look for indicators that point to a 4+ day trend.. very short term trends tend not to be enough.

Mike

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To: david siple who wrote (13)2/26/1998 12:59:00 AM
From: William Nelson
   of 33
 
David, I'm interested in hedging some with these options....
December 7600 sounds like exactly what I want.
But, I haven't dealt with options before-would you mind explaining
a couple things to a newbie?

1. What exactly is one djx put? If I have one 7600 put in Dec. and
dow is at 7000, is it worth $600? Or 60? Or something else??
Also I saw several Dec 7600 puts listed for quite different
prices....but I couldn't understand the difference between them.

2. How do you exercise them if it comes to that?

Thanks in advance-

W.N.

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To: William Nelson who wrote (17)2/26/1998 8:58:00 AM
From: david siple
   of 33
 
hmmm. I will make an attempy. Pehaps someone else on this bd can fill in the gaps....
I.E. Dow's at 8500. You buy say 2 76 puts at 3$ each: 2x3=$600. The closer the DOW avg gets to 7600, the more you make money or go toward being "in the money." "In the money" is when it actually hits 7600; from there it's mostly all profit.... December is now 10 months away. The closer Dec. gets, the less your dec 76 puts are worth. In options, TIME is a major factor. i.e. if you bought them at $3 today and tomorrow the dow hit 9000, yr options would be nearly worthless. BUT, if the dow fell to 8000 tomorrow, it would be seen as a positive and time is on yr side--plus closer to yr "in the money" target price of 7600.
In regard to can you "exercise them..." I have no idea. I don't see how... (Someoene have a better answer???) Myself, I rarely exercise options: remember, when you do, you don't get your initial investment back (i.e. the 600$). IF you did/ or were able to, you would pay 7600x3= 22,800 to own it.... then, if the dow hit 7500 you would make 100$ (7600-100 points=7500$).
If this is too simplistic or difficult, pardon me.
Now, in regard to prices: you are seeing several listed??? Where? There is only one 7600 put (etc) w/ one bid n ask. Go to dailystocks.com , enter symbol DJX. Then towards bottom on left, choose option ("very complete"). That will show you puts n calls. The DJX Dec 76 put is DJxxx.
Does this help?
--ds

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To: david siple who wrote (18)2/26/1998 9:12:00 AM
From: MJR
   of 33
 
A great spot for the fundamentals of investing, including how to get a free starter kit on trading options on the Dow (although the principles are trie for all options) can be found at the Chicago Board Options Exchange's website at www.cboe.com.

The "official" answers are all there to your recent questions and better than add my personal spin on it, that's the source to go to.

Good Luck.. have fun with options!
Mike

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To: FR1 who wrote (8)2/28/1998 6:49:00 PM
From: jeffrey roberts
   of 33
 
Franz,

What are the chances we will see a down market in the next month, in your opinion?

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To: jeffrey roberts who wrote (20)3/1/1998 3:16:00 PM
From: FR1
   of 33
 
To be honest, I have kind of given up on playing the DJX. I shoot for individual stocks. AAPL, CPQ, RXSD and ATHM are my favorites and have done me well so far this year.

The problem with the DOW is that it represents a broad cross section of businesses and some are and will be hit by the Asian flu and some not. Kind of rocky predicting who and how much. Basically, anybody that sells big to that market is hurt some because the people over there have no money. Caterpillar and people with big iron/construction stuff are getting orders cancelled because governments have no money and therefore must cancel their state projects. Food guys like ADM are getting orders cut because of the same reason. The impact is not super great because USA taxpayers are bailing the ship as it takes on water (US Gov. is buying the food ADM can't sell, World Bank (taxpayers) pays off US banks bad loans, etc.). Also, there really wasn't that much cash there in the first place (they were primarily exporter countries not importers).

The long run (1999+) looks super rosy, though, because we are forcing these countries to create business laws and bankrupt some businesses (banks included) that politicians simply use as a front to hide cash they steal from taxpayers and foreign aid. Won't get them all and dictators will survive but it will be a new ball game.

So the bottom line to me is that most businesses will not be hit but the dow is not very predictable and it is best to stick with stocks that are nowhere near the problem. ATHM is an example and a lot of others.

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To: giddy guru who wrote ()3/7/1998 9:32:00 AM
From: Dr. Peter E. Pflaum
   of 33
 
I have day plays on wiredbrain.com using a indicator including CME and Fx, foreign markets, interest rates and market position - It works if you wait until index is over 10 and sometimes when over 6.5 + - take a look and see for yourself

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To: Dr. Peter E. Pflaum who wrote (22)3/9/1998 10:00:00 AM
From: david siple
   of 33
 
Dr.Peter, Thank you for such a great LINK. It's so full of info. , that it could take one days to go through. I will definately monitor it-backed by yr respect for it-- over the next several days.
--ds

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To: david siple who wrote (23)3/17/1998 10:54:00 PM
From: Dr. Peter E. Pflaum
   of 33
 
Any suggestions ?
today's idea
TUESDAY:

GEN MAGIC INC (Nasdaq:GMGC) no options at 4 7/8

That's why I was intrigued to read that General Magic has just acquired NetPhonic Communications, the maker of
Web-On-Call, which is basically a "voice browser" giving you voice-synthesized information from any Web site through a
touch-tone telephone (a demo is available at netphonic.com). General Magic intends to incorporate this voice
browser into its forthcoming Serengeti product, due out this year, which promises to integrate voice mail, Email, faxes, address
books, and calendars through a natural language voice user interface
genmagic.com.

Technology Advancement of the Year

'Perhaps one of the most unusual and innovative palmtops available is the REX. This diminutive device is the size of a PC card
and for good reason -- the organizer is designed to actually fit into the PC card slot on a PC or laptop computer.''

Starfish conceived, designed and developed REX. The core technology building blocks used to develop REX are part of the
Starfish TrueSync Technology Platform (see related release from August 7, 1997). Starting in 1994, Starfish developed the
TrueSync Technology Platform to provide a technology foundation capable of delivering leading-edge products and services in
a rapidly changing Connected Information Device market. Connected Information Devices include pagers, cellular
phones, PC Companions, palmtop PCs and other devices that are capable of seamlessly synchronizing information with
desktop computers and specialized servers. Starfish works closely with leading device manufacturers and cellular, paging and
telecommunications operators to develop complete, customized solutions built on the Starfish TrueSync Technology Platform.
Motorola (NYSE: MOT - news), Hewlett-Packard (NYSE: HWP - news), General Magic (NASDAQ:GMGC - news) and
Franklin Electronic Publishers (NYSE: FEP - news) are among Starfish's partners. Founded in 1994, Starfish is privately held
with headquarters in Scotts Valley, California. More information can be found at www.starfish.com.

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To: Dr. Peter E. Pflaum who wrote (24)3/27/1998 12:16:00 PM
From: david siple
   of 33
 
HI Peter,
sorry for the late response--have been out of town. Looks REAL interesting. Going to check out sites. Did you play it?
--ds

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