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Choice 1: Wait until the stock gets back to $40. May take Years!!
Choice 2: Throw in another $18,000 to buy 20,000 more shares. Your average is $2.76/share.
What if you do not have the $18,000 or the stock drops further to $0.50 after you buy? Better than 1 but Not a good choice
Best choice: Without spending any of your own cash sell someone the option to sell you 20,000 shares of Lucent at $2.50 within 2 years. You will receive $40,000 immediately . you will get to keep the cash if the stock reaches $2.50 at any time in 2 years. You will not lose any cash even if the stock drops to $0.50.
If the stock has bottomed, (A simple test in the book will show you how) you could use part of the cash ($18,000) to buy 20,000 shares of Lucent and have $22,000 cash left.
On 11/29/2002 LU closed at $1.76 and the option you sold for $2.00 are now at $1.40 . You could buy the option back for a profit of $0.60/share or $12,000 total profit and sell the 20,000 shares you just purchased for $0.80/share profit or $16,000 total profit. You have now recovered $28,000 of your $39,100
In fact this is just one of the techniques described in this book that will help you recover your losses while generating cash. --This text refers to an out of print or unavailable edition of this title.
Very poorly edited book mainly on using options and technical analysis.
The book suffers from poor editing and poor layout. Read more
Although the system explained in the book can be put to good use, it is very complicated and the book is too long trying to explain it. Read morePublished 19 days ago by Justin Time
this is my second copy; gave away first copy to friend, who is full of praise for this book.Published 2 months ago by mary chang
I learned a number of very useful and profitable strategies from this book. This book stresses the importance
of incorporating the underlying security's behavior into the... Read more
So, I am NOT living the dream; but at least I can dream the dream. Unlike so many helpful reviewers before me, I'm not really playing the market. Read morePublished 7 months ago by 4321dud
This is one of a very few books I read that show you how to actually trade options profitably.
The book is loaded with ideas that demonstrate, using actual stock examples, how... Read more