[CANSLIM] Options

From: "DMC197807" <dmc197807@comcast.net>
Subject: [CANSLIM] Options
Date: Thu, 21 Aug 2003 19:04:45 -0700
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Dan,

The one problem with options is it is very hard to limit yourself to an 8%
loss, and the timeframe is a question.

Just for example, let's assume you were fascinated with LF and decided to
buy options.

Would you buy Sept or Oct.?? If you were confident of the breakout you might
choose Sept at the money calls, the 35s are on sale for 1.65 X 1.75.

If it broke up to 40, they'd be worth $6 in a hurry.  Nice.

But if it dropped back down to 30 they'd be worth 15 cents.  Maybe.  Add in
the expensive commissions and you can see where things go.

You'd have to deal with these things in more of a "nominal amount" analysis
to make any sense of it and just assume that $1.75 total loss is not 100%
loss, but rather a 5% loss on the nominal $35 value of the stock.  Since you
are risking 1.75 to make $6, that's not a bad thing to do, and it takes a
lot less capital.

For me, I'd want to know much more about the likelihood / frequency of
failed breakouts which would give you a better idea of whether or not
expensive options are a viable way to play CANSLIM.

As to buying cheap options, there's a lot of literature and learning on that
subject which is more than this thread probably wants to delve into.
Suffice it to say SFO magazine has a lot of good articles on the subject and
there are a slew of options sites (cboe.com, optionvue, schaeffer's, etc.)

DMC


- ----- Original Message -----
From: "Dan Forant" <dforant1@nycap.rr.com>
To: <canslim@lists.xmission.com>
Sent: Thursday, August 21, 2003 3:53 PM
Subject: Re: [CANSLIM] Intro: David Pinhasik


> What about options?? Buy an in the money call breakout time for a mere
> fraction of what 100 shares would run,.
>
> DanF
>
> ----- Original Message -----
> From: "Ian" <ianstm@shaw.ca>
> To: <canslim@lists.xmission.com>
> Sent: Thursday, August 21, 2003 2:32 PM
> Subject: Re: [CANSLIM] Intro: David Pinhasik
>
>
> > Hi David:
> >
> > I am the minority view, and some would say it is NOT CANSLIM at all, but
> > with just $1000, I would consider some sub $5 nancaps with CANSLIM
> > fundamentals, growth, low P/E, a strong outlook, and a strong chart. All
> > these things are the same thing you look for in $15+ CANSLIM stocks, but
> > they apply to the nanocaps as well.
> >
> > IMHO, your odds on the nanocaps are better (more winners, less
reversals)
> > because of the lower relative valuation, and the fact that 'value'
> investors
> > come in as well. But for most people, and almost all institutions, the
> > absolute dollar value of potential gains is too small to consider them.
> But
> > with $1000, they are very attractive.
> >
> > Some recent examples - to see what kind of thing I am talking about,
(not
> > buy recommendations here, my strategy on these kind of things at this
> point
> > is to wait for a pullback to the 13-day ema):
> >
> > OMNI
> > MILT
> > HSR
> >
> > The important thing to note in the charts of all 3 is the 'relative'
> > increase in volume in the last week or two. Even though the volume is
> still
> > very small, they have all seen a quantum jump in daily volume.
> >
> > The best place to find these, in my experience, is in the "earnings"
> section
> > of IBD.
> >
> > Cheers,
> >
> > Ian
> >
> >
> >
> >
> >
> > ----- Original Message -----
> > From: "The Pinhasiks" <pinhasik@012.net.il>
> > To: <canslim@lists.xmission.com>
> > Sent: Thursday, August 21, 2003 8:26 AM
> > Subject: [CANSLIM] Intro: David Pinhasik
> >
> >
> > > Hi,
> > >
> > > I am a computer programmer working for IBM Global Services. Before the
> > > market went South, I was active lurker (read Tom's posts very
carefully)
> > and
> > > made 100% in 5 short weeks, and since then have been in cash  most of
> the
> > > time except for a few dismal attempts to reenter the market, always
> > followed
> > > by a failure. Now, it seems like it may be the time to try again,
albeit
> > > carefully. My problem is that <blush> I have less than a $1,000 to
play
> > > with. Could anyone offer a way to screen CS stocks without paying a
> > fortune?
> > > I used to use Tom's Weekly Weeview as a starting point for my
research,
> > but
> > > now I'm clueless. Any suggestions will be happily accepted.
> > >
> > > Thanks,
> > > David
> > >
> > >
> > > -
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>
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