Re: [CANSLIM] Options

From: "Dan Forant" <dforant1@nycap.rr.com>
Subject: Re: [CANSLIM] Options
Date: Fri, 22 Aug 2003 07:24:16 -0400
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Limiting losses to 8% with options is cutting it too thin. 25% is more like
it. Won has good advice for options. I'm not advocating using options in
general, just when certain conditions develop. Ameritrade's options fees are
around 12.50 + 1.50 per for additional contracts. Not exactly exorbitant.

DanF

- ----- Original Message ----- 
From: "DMC197807" <dmc197807@comcast.net>
To: <canslim@lists.xmission.com>
Sent: Thursday, August 21, 2003 10:04 PM
Subject: [CANSLIM] Options


> 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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