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Author Topic: Index vs Company Options
JLo
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China scare forced DOW to dropped > 200 pts midday in 4 minutes. That's why I dont play index options. Preferred individual company opts for diversification. Not that I haven't done index opts, plenty of it. But I think company opts is safer if you done your studies, and especially if you short them regularly.

Your thoughts, horror stories ?

Incidently I bailed out of all china stocks 2 weeks ago.

Posts: 130 | Registered: Jul 2005  |  IP: Logged | Report this post to a Moderator
metal1
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FYI the 200 pt drop in 4 minutes was caused by computer delays. it would have been more orderly had the sell orders not backed up.
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JLo
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Sell orders backed up are also known as crashes...

My experience with index options including OEX's have not been positive. When it goes against you there's nowhere to hide. If you do the homework and diversify into 4 company opts in different industries, you get more protection. Just my experience.

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JLo
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Metal, I beg your pardon. CBS mkt watch article indeed said DJ wasnt calc the index correctly and switch to back up system. Around 3pm, all the prices got updated at once, making it looked like dropped happened in a single instant. The drop had been more orderly than appear.

Still I know a lota folks were hurt by stoplosses.

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