LEAPS Put Options that expire in 2001 will make you a FORTUNE!

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Buy LEAPS Put Options on stocks that are going up bigtime. IBM has been going up big time. That means you can buy Put Options at a very low price. Only buy LEAPS Puts that expire in January 2001, in case the market crashes after Y2K. Other stocks with low priced Put Options are....AMGEN- AMGN. Hewlet Packard- HWP. PFIZER- PFE. INTEL- INTC. LEHMAN BROTHERS- LEH. EXXON-XON. Northern Telecom-NT. MOBIL-MOB. CATEPILLAR-CAT.

I'm holding off for a while to buy more Puts, and buy at a market top. I'm guessing that will be maybe in August or September. There are forces out there that are artificially driving the market up and driving the price of Gold down. The big boys will bail out in September and buy gold at a low price.

Then the big crash comes and those who are smart enough to take my advise can make a fortune. Check with your broker how to trade Options. There is enough time right now for you to learn to trade options. You buy call options if you think the stock goes up and put options when you think the stock goes down. If you buy January 2001 Put Options you cannot go wrong!

A small move in a stock causes a big move in an option. $1000 invested in LEAPS Put Options could return you as much as $40,000.

DO IT!!!

-- freddie (freddie@thefreeloader.com), July 03, 1999


Freddie, Are all LEAPS listed daily in the Wall St. Journal or can your broker generate a LEAP trade for any large liquid stock? What do you consider to be a reasonable brokerage fee on LEAPS trades?

-- Pt (achillesg@hotmail.com), July 03, 1999.

Pt, I trade on line with Investrade. www.investrade.com/

Investrade charges $14.95 per trade. Very good price!

I get my option prices from http://quotewatch.com/ Type in the stock name and then click on option chain. The option chain shows the call options on the left side and the puts on the right side. The further out of the money, the lower the price.

Check out www.OptionAdvisor.com for free info how option work.

IBM has real good low put option prices. As the stock keeps going up, the put prices go lower and lower.

Good luck!

-- freddie (freddie@thefreeloader.com), July 04, 1999.

Pt, when you find the option chain, you will find the LEAPS options on the bottom of the page. They are listed under January 2000 and January 2001.

When an option price is $1.00, you will pay $100 for a contract of one hundred option shares. It's like trading in penny stocks, but if you guess the right direction of the stock, you can double your money in a week! If you guess wrong, usually you will break even in about one or two months as the stock comes back the other way. That is why you always want to buy options that have at least 4 or 5 months left before they expire.

The reason I now buy options that expire in January 2001, is because I don't know the exact date the market is going to crash. If you buy January 2001 put options, your profits are 99% guaranteed! You just have to have patience and sit on your put options and wait for the big crash.

If you buy your puts, and the stock goes up some more, the value of your puts will go down, but don't worry, when the market crashes and then they will go ballistic. So have patience my friend, and you will make big bucks this year!

Be sure to get out of the game and cash in and close your account and then buy gold or silver to preserve and increase your profits!

Good luck! I'm glad there is at least one person interested in making money from Y2K. It's a chance of a lifetime!

It is very possible to increase your money 40 to 60 times if the Dow goes down to 2000 or 3000.

$10,000 could make you $400,000 to $600,000 or more!

-- freddie (freddie@thefreeloader.com), July 04, 1999.


I'm looking at the IBM prices now, which one specifically would you recommend for puts in 2001, for example there seems to be a lot of volume on this one (86),

01-20-2001 140.00000 ZIBAH 23.0000 24.0000 86 ZIBMH 22.1250 23.1250 0

How do you read the chart in this case,

is there a web site that explains this?

thanks, Andy

-- Andy (2000EOD@prodigy.net), July 04, 1999.

Stop, look both ways, and think about it.

As of Friday's close, $1000 could buy one contract of ZIBMB, Jan 2001 IBM with a strike price of $110. If IBM stock dropped in half, from $130 to $65, the ZIBMB contract would be $45 in the money. With premium, it might sell for $5000 to $7000; not $40,000. If IBM stock went to $0, that contract might be "worth" $11,000, but then again, it might be worthless.

If you are guessing that Y2K will be a 10 scale disaster, you may expect the options market to self destruct, and you may not be able to sell the contract at all.

So, yes, look into LEAPS Put options, learn how options work, consider index LEAPS, consider various strategies, consider how much money you can afford to lose if the market does better or worse than you guess, and think, and then think some more.


-- Jerry B (skeptic76@erols.com), July 04, 1999.


ZIBAH is a call option. You would only buy them if you expect IBM stock to go up, and in the particular case if ZIBAH at $24 with a strike price of $140, up to more than $164 per share.


-- Jerry B (skeptic76@erols.com), July 04, 1999.

Thanks Jerry,

so ZIBMH is a put at nearly 24 = 140-24 = must decrease sub $116?

-- Andy (2000EOD@prodigy.net), July 04, 1999.


To break even on ZIBMH if you bought it at $24, IBM stock would have to drop to $116 by Jan 2001. However, during the period before the expiration date, options trade at a price that includes a "premium", which is larger for far off expiration dates, and smaller for near expiration dates. So, if IBM stock dropped to $116 this year, or early next year, ZIBMH could be profitable at that time because of the premium.

However, since ZIBMH is now "in the money", I would not consider buying it.

FWIW, I do not make investment recommendations, but I will sometimes mention what I might or might not do with my money, and may sometimes express general opnions about some kinds of investments. I worry that something that seems "a sure thing" can go wrong. For the past few years, many savvy investors have been "certain" that the market would have tanked before now.

So, please use caution when considering anyone's investment opinions, including mine.

OK, some general opinions on options. I like LEAPS because they have longer terms than regular options. I like index options, such as the DJX, because I don't have to be smart enough to guess which company is most likely to drop a bunch; they also seem to have more expiration date choices than stock options. I like to buy way "out of the money", but this has pros and cons. Buying way out of the money means I can buy contracts at much lower prices, but it also means the underlying has to move in certain ways for me to do well. (In that sentence, the word underlying would refer, for example, to IBM stock in the case of ZIBMH, or to the Dow Jones Industrial Average in the case of a DJX option.) Large percentage gains on options usually require a combination either of 1. buying way out of the money and a very large move in the underlying, or 2. buying slightly out of the money on an option that is just about to expire, and then a quick move into the money, i.e. incredible luck.

Then, let's imagine that things move in a direction that makes an option worth a bundle. When do you sell it? Do you wait to see if things will move further in the same direction and make a bigger bundle, but risk things turning around and making a smaller bundle, or perhaps no bundle at all? Picking a market bottom is just as tricky as picking a market top.

I think there are good reasons to consider investing in put options as another kind of Y2K insurance, but I very much want to encourage thinking it through with caution.


P.S. You can find descriptions of various options at:


-- Jerrry B (skeptic76@erols.com), July 04, 1999.

Just ask yourself where the SMART money is going. Into LEAPs? Maybe, but I would be surprised. Warren Buffet put some money into silver futures. My opinion is to try to conserve capital over the next two years, not to risk it.

-- Mara Wayne (MaraWayne@aol.com), July 04, 1999.


Berkshire Hathaway has so much money to invest, Warren Buffet is having difficulty deciding where to put it. At the end of 1998, BRK had over $13 billion in cash or equivalents on the books. At the end of 1Q99, it had over $14 billion on the books.

BRK and/or its subsidiaries does get into options, but it seems that most of its derivative activity is in interest and currency swaps.


-- Jerry B (skeptic76@erols.com), July 04, 1999.

Jeez, I never met a real market timing genius before.

-- dave (wootendave@hotmail.com), July 04, 1999.

freddie: What if the stock market crashes so fast that you can't sell at a profit? Are you sure you can pull out at the highest point prior to a major crash?

-- Randolph (dinosaur@williams-net.com), July 04, 1999.


" What if the stock market crashes so fast that you can't sell at a profit? Are you sure you can pull out at the highest point prior to a major crash?"

In the case of put options, getting out after a crash is "best", as long as the exchanges and the options system are still functioning.


-- Jerry B (skeptic76@erols.com), July 04, 1999.

When you sell an option, others will eagerly buy it in the hopes that the option will increase in price. However, I don't know why anybody would want to buy at the money put options. They are too expensive!!!

When you get ready to sell one contract that you paid $1000 for and is is now at $20,000, it would be foolish for anybody to buy it at that price, thus it would be very hard to sell.

However if you buy far out of the money put options at 50 cents a piece and buy 20 contracts for $1000, and they go up to $20, you make 40 times your money! This dude above has no clue about volatility and how it accellerates the price of put options big time in a big crash! When a 50 dollar contract goes to $1000, it would be much easier to sell to somebody else. A $40,000 contract would be impossible to sell.!!!!!!

A $100 investment in 50 cent put options could very easily turn into $40,000 when the dow drops to 2000!!!


-- freddie (freddie@thefreeloader.com), July 04, 1999.

OOPS! That is $1000 worth of 50 cent options, not $100.

-- freddie (freddie@thefreeloader.com), July 04, 1999.

Right now a far "IN" the money January 2001 IBM $100 "call" option contract sells for over $40 a share, that is $4000 per contract.

There is no reason why, with a major market crash, that $50 Put contracts would not be worth $1000 each. Thus a far "OUT" of the money Put at $50 per contract could easily turn into a $2000 contract! 20 times $2000 is $40,000. That is 40 times your money!

Buy 20x $50 Put contracts for $1000 and through volatility with a Dow drop to 2000, the $1000 will turn into $40,000.

$10,000 could turn into $400,000.

Right now the volatility is on the call options side and I see IBM call options go for over $7000 per contract. I'm only saying a Put contract could go up to $2000. I'm being extremely conservative!!!

If right now IBM call options are over $7000 each, with a major market turn around with a DOW at 2000, it is very conservative to say that a put option could hit only $2000 per contract!

Hey it is very possible that a $50 Put could go to $7000 like the call options right now!



-- freddie (freddie@thefreeloader.com), July 04, 1999.

Randolph. You don't get out of a Put position "prior" to a market crash! You get out AFTER the market crashes! Put options make you money when the market goes down. The deeper it crashes, the more money you make!

-- freddie (freddie@thefreeloader.com), July 04, 1999.

Mara Wayne, I have not seen one article that said that Warren Buffett has purchased silver futures. I watch the PM'S everyday... But,..Mr. Buffett has TAKEN PHYSICAL POSSESSION of over 179.2 MILLION ounces of the white stuff.(silver) Wonder why he has done that? Think about it. Do you think he's leasing it out? NO WAY. The smart money knows whats comming down. Over the last 3 months I have taken PHYSICAL POSSESSION of 20,330 ounces and I will buy more soon. WHY? Because Warren Buffett is the second richest man in the world and he's buying it!!

-- SILVER BULL (nospam@nospam.com), July 04, 1999.

"This dude above has no clue about volatility and how it accellerates the price of put options big time in a big crash! "

Freddie, you're the wrong guy on the right topic. Thanks for being around, Jerry B. Patience is a virtue, even when you're dealing with volatile investments.

BTW, Freddie, I tracked volume on SPX puts through the summer of 1987, and was halfway looking at a 1/16 put that went to 40 ($600 to $400,000) in a day with the 22% drop. Coulda woulda shoulda. I know that's what you're thinking of -- so, GOOD LUCK, PILGRIM!

Commissions cost you going in and out. You PAY for volatility -- the put sellers are market-wise, too. You're just hoping they haven't yet factored in y2k as you have. But then you risk the options exchange being unable to guarantee paying off your winning contract in a complete market meltdown, so it isn't as good a bet as it would normally have been. Plus you might not be able to cash out your winnings if your brokerage account is frozen or banks won't cash a check from your broker. You win the bet, but the casino shuts down before you collect.

Conclusion: Use your y2k "play money" to play freddie's game, and enjoy the play either way. As always, DIVERSIFY! y2k isn't about making a fortune in the deal of a lifetime; it's about staying ALIVE.

-- jor-el (jor-el@krypton.uni), July 04, 1999.


you're making a lot of sense here - thanks for the information - anymore pearls of wisdom before I blow a few grand on your theories (and I do believe the dow will drop to circa/less than 3,000, IF the markets and Banks survive - which looks very very iffy IMHO) - even though I think the banks will hose, I can't afford not to take a position on the chance that they will just scrape through after major major problems and holidays... it's a dice game.

And as for silver - all I have is 500 ounces, more to come, perhaps the way to go with silver is some call options expiring in 2000...

-- Andy (2000EOD@prodigy.net), July 04, 1999.

In the example that Freddie gave of IBM Jan 2001 put options with a $50 strike price, he posits the price of IBM stock dropping approximately 60% to 70%. while the Dow Jones Industrial average drops approximately 85%. In such a scenario, the options sytem, to put it mildy, would be severely stresssed; so much so, I would guess (and it is purely a guess), that the options system may break down long before matters reach such points, due to unsuccessful margin calls. Indeed, in such a scenario, the exchanges may close, either due to general mayhem or government edict.

If market conditions seem to be headed to such levels, it may be prudent to cash out well before such levels are reached.

In such conditions, the "safer" investments would seem to be "selling short" and selling "futures", but these kinds of investments are very risky, especially in a market trending toward la la land for the past several years.

A couple of years ago, you could see Jimmy Rogers regularly appearing on CNBC talking about the high probability of the stock market turning around and dropping real soon now. Jimmy has had a lot of very successful investment experience. He is, or at least was :-) , a multimillionaire, and is a former investment associate of George Soros. (I use the word associate loosely; I think Jimmy was a serious contributor to some of Soros' investment successes.) But Jimmy does not show up on CNBC very much lately. Either he, or CNBC, got tired of Jimmy saying the market would be likely to turn around, while the market kept going up and up and up.

I have no idea how much investing experience Freddie has, or what his track record has been. I am concerned that his enthusiam for the gains that might be made, if thing go very much as he guesses, may diminish his attention to possibilities that things may go in quite unexpected ways. While I have no hope of persuading Freddie to "get a grip", I may hope to remind others that we are entering "uncharted waters", and that it is prudent to keep in mind that specific investments will be profitable only if specific ranges of potential possibilities become reality.


P.S. Jor-el, thanks for the kind comment.

-- Jerry B (skeptic76@erols.com), July 04, 1999.

Jerry and Jor-el, you guys are worried about me riding the puts all the way down. That's too risky because of a possibility of the stock exchange going down in 2000.

With every 2000 drop with the Dow, I plan to cash out and keep most of my profits and get back in againg with some more puts that are further out of the money and continue to do that till a Dow bottom.

Perhaps I will not be able to cash out on my last trade if things fall apart, but I will have made a bundle. I will then close my Investrade account and use my profits to buy silver and gold to preserve and increase my profits.

-- freddie (freddie@thefreeloader.com), July 05, 1999.


"Jerry and Jor-el, you guys are worried about me riding the puts all the way down."

I am worried for you and for anyone who might read this thread. More than riding the puts all the way down, I am worried that someone may imagine that they know how far "all the way down" is.

I am worried that someone who is worried about their savings might grasp at an idea that seems to be a sure thing, bets the farm, or the south 40, on a DJIA 3000 and then loses it because the DJIA drops to 5000, stops dropping, and begins to recover, however slowly. Now, I am not saying that the DJIA will or will not drop to 5000 or 3000 or any other given number; I am saying that we will not know until after the fact, how far, and when, it will drop, and how often, and how much, it will bounce along the way.

There are many things to consider, some of which have been mentioned in this thread, most of which have not. Anyone considering these kinds of investments probably should do some studying first, and the studying should include more than just the mechanics of puts. Then a large variety of "what ifs" should be considered, not just the ones that look like big winners. Then, proceed with caution, be prepared to be wrong, and hope things turn out well.


-- Jerry B (skeptic76@erols.com), July 05, 1999.


Possibly someone you love...Because conversations like this have been taking place in bars and boardrooms all over the world during the past year, rather than discussions as to how to safeguard people, communities, infrastucture and society.

You guys ought to be ashamed of yourselves. I think I'm going to be sick.


"Who do I have to fuck to get off of this ship?"--- Ellen Ripley

-- (Hallyx@aol.com), July 05, 1999.

Let me simply express dissent with the idea that "conversations like this" may have any causal relationship with anyone's premature demise.


-- Jerry B (skeptic76@erols.com), July 05, 1999.

Hallyx, This thread is not a geek "death-pool" with an over-under on the y2k population decimation. We're talking about some average joes putting a few hundred or maybe a few thousand dollars worth of mad money into options contracts. If you find that sickening, then your sensibilities have ying-yanged themselves into insensibilities. This market is gonna come down hard whether from y2k or reasons unfathomable. But it might go to 20,000 before it does. If that's the case, then I'll have a beer and cheer farewell to my mad money. On the other hand, if it crashes, then I'll have a beer and buy my neighbor one too. And if you stop gagging in time, I'll buy you a pint as well.

-- A (.@...), July 05, 1999.

Ouch! When someone whose voice I have come to respect lumps me in with something they find distasteful, it hurts (a bit, anyway.)

I imagine, Hallyx, you skimmed the thread quickly (as we all ought to read more quickly now, in July 1999, than we ever have before) and posted impulsively. Freddie has been hard to take on this topic all along, and short of advertising himself as an options broker, baffles me in his enthusiasm.

"discussions as to how to safeguard people, communities, infrastucture and society." I think that was the gist of my conclusion about "staying alive" as opposed to making a "y2k killing."

If you're looking for my old leftist altruism, I'd say, dear Hallyx, that we may be about to get our "Revolution," only with a large populist component from the Right and Libertarian middle class complicating some of our ideologically pure jargon. This IS America, after all, a deeply-conservative country from the start. You work with what you find. TPTB are barely understood by ANY of us, and look down on us all as peons.

As for options vs. y2k preps, we are ALL making investments of our lives' savings from years of hard work, and at age almost-50 with small children to support, I can't afford to make too many (more?) mistakes. I have not had stable, well-paying employment in my ENTIRE adult life. I find myself more apolitical (un-altruistic?) and even secretive than I have ever been in the face of national crisis. I may be just too tired to take the consequences of a decade-long depression without having some kind of edge, and that's why I frequent the wise company of this forum.

God, and I'm posting this all of Freddie's idiotic thread!

Anyway, any "investors" out there, (I'll shout here) DO NOT DO ANY MAJOR OPTIONS BET UNTIL YOU UNDERSTAND BLACK & SCHOLES OPTION PRICING. Probably, you should be able to do quick risk/reward calculations in your head, too; it's what we're all doing these days with cans of tuna, generators, etc.

-- jor-el (jor-el@krypton.uni), July 05, 1999.

Did I state my opinion a little too strongly? I've re-read this thread and stand by my opinion, if not the style in which I expressed it. This is surreal, like taking a break during an AA meeting and finding people you like and respect having a beer on the back porch.

Andy, jor-el, A and Mara I'm familiar with. And while it doesn't appear they're buying into freddie's pitch, I only see objections to it on mechanical grounds. No one seems to have any moral qualms about a system of making money for --not just unproductive endeavor--anti-productive investing. That's not investing, that's gambling, like hedge funds. It produces nothing but paper wealth for shysters and cons and real misery for real people. Your little "mad money" makes no difference in the overall scheme of things. It's the attitude which I find repulsive. And it's got nothing to do with altruism vs. selfishness. Being a big Garrett Hardin fan, I'm not naive enought to think it's that simple. Right now I'm reading Adam Smith's classic for the second time in thirty years. I'm confirmed in my memory that Smith's "invisible hand" is not the velvet-gloved iron fist of the transnational CEO. Poor Adam is probably spinning in his grave seeing the corruption of his principles as practiced today. Investing surplus wealth to help a company grow and being rewarded for your risk is not the same thing as gutting a company, shifting its remaining assets overseas and calling your blood money a reward because its stock value has increased; it is not the same as gambling that a company or market will tank. That's like betting on the opposing team; it promotes corruption and encourages plunder and (dare I say it?) sabotage.

This is much the way I view the current political system. Were Jefferson, Hamilton, Adams and their consort to be suddenly resurrected, would they recognise this government of, by and for the people, as they envisioned it? Again, it is the lack of moral outrage that I find so offensive.

Btw, jor-el, as I've stated in earlier threads, I find areas of commonality and points of agreement with certain friends on this forum and in real life whose views are considerably to the right of mine---almost as if we meet on the other side of the cicle. I think gilda might understand what I mean.

*sigh* Thanks anyway for your moderate responses to my earlier tirade. I would not have even bothered opening this thread had it not bounced to the top as often as it did.


"Shams and delusions are esteemed for soundest truths, while reality is fabulous.... By closing the eyes and slumbering, and consenting to be deceived by shows, men establish and confirm their daily life of routine and habit everywhere, which still is built on purely illusory foundations." --- Henry David Thoreau 1817-1862

-- (Hallyx@aol.com), July 06, 1999.

I find much with which to take issue in Hallyx's recent post, but I do not wish to get sidetracked by what appear to be fundamental misinterpretations of economic processes, and/or unspecified moral presuppositions.


-- Jerry B (skeptic76@erols.com), July 06, 1999.

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