I am not sure if I will ever be able to blog coherently again. For a week I have been immersed in a rare, esoteric language which nobody in their right mind really speaks, but in order to participate in my new hobby it has been critical that I learn it. My brain is reeling and I am beginning to think I have made a huge mistake. (won't be the first and I sincerely hope it won't be my last....if you know what I mean.....)
Well, my darlings, if you consider that first paragraph a bit of an enigma just wait till I start spouting whole sentences, paragraphs, yea pages even that don't make any sense whatsoever. I have spent hours bruising my brain with decisions like whether a covered call framed in a vertical spread is a better tactic than entering into a short straddle whereby I must be willing to accept exercise or assignment on either leg.... (of the transaction, that is).
Or perhaps I might dare venture into the dangerous world of the naked call or put. (Believe me, it's not what you think) I am warned that if I enter a naked put and the market moves against me and the stock's price is lower than the put's strike price upon expiration (whose....mine or theirs?) I might indeed have to clench my teeth and suffer having the stock put to me whether I like it or not. That somehow sounds like it might be uncomfortable, painful or even a bit maiming, no? Well, that just gives you a taste of what I have coping with trying to fathom the intriguing, incomprehensible and totally frustrating world of stock options. Aaarrrrggggh.
I am all for continuing to learn even into one's dotage, but I think I may have bitten off more than I can chew this time. It all began a few weeks ago when I woke up and decided there was absolutely no incentive for me to get up at all.........no challenges awaited (except for those like cleaning out the closets which I have been putting off for 5 or 10 years but am sure to get to one of these days. No happy surprises were in store for me.........I had already received my last internet order of those storage bags which promise to compact your fluffiest possessions down to the thickness of a microchip with the help of using your vacuum to suck the air out and found that they do a passable job but no ecstasy results from it. I have been forced into the unenviable position of having to give away some of my afghans due to no room left in any closet (despite the promises of those sucky bags) (No...this is writer's rhetoric....I love to give away my afghans.....the problem is I just can't stop making them). Face it......I, who rarely in my lifetime have been bored (except at cocktail parties) was suddenly bored to tears because I cannot physically do the things which used to keep me amused......like building a 6 foot blue velvet couch or a stained glass window etc. Life, as I knew it, was over. Sigh.
And then I happened to accidentally read a piece of junk email (not quite spam) which begged and pleaded with me to realize the huge opportunities that Stock Options offered in a Stock Market such as we are experiencing. Being weak and vulnerable I fell into the trap and read the whole damned thing (usually a disaster) and it really offered a nugget or two of interesting information. Before I knew what I was doing I found myself on Amazon checking out the various "How to" books on stock optionsand ordered one.......used, of course.
You see, the truth is that may years ago I had what you could call "dabbled" in stock options and fortunately had enough sense to shake the whole thing from my fingertips like a 200 degree shred of melted mozzarella when I saw the column labelled "net profit/loss" contained too many negative numbers. I realized I didn't know what the hell I was doing and felt lucky to get off so easy. But the lure of a process where you could be naked in a transaction (figuratively, of course) never totally left me and I decided that perhaps if I studied I could learn enough to do it right this time....I confess it is the hardest subject I have ever tackled with the possible exception of "Deductive Logic" in the Philosophy Dept at UCLA.......a subject which I naively assumed would be fun like solving mysteries and found, to my horror, that it was 2 parts incomprehensible math type equations blended with 3 parts something like breaking down sentence structure in 8th grade English. I fear I will never be able to erase from my mind the memorable prime example of diagramming and proving the truth of the sentence "If it rains, the street is wet." ugh.......quell horror.......But I digress.......
I am still feeling my way gingerly into this new endeavor and pray that it will turn out to be both exhilarating and profitable. So far I am not sure whether it has touched or even come close to either of those goals. The thing it did do was to get me out of bed at 7am (the market opens in New York at some awful hour and we are 3 hours earlier) and had me staggering and tripping over my cane as I made my way to the computer to check on some paper trades I had entered (mythical trades....no money involved). This totally confounded the cats who never expect to see me before 10;30 on my best days, not to mention what it did to my daily naptimes. The household has been in total disarrangement. No one knows when to eat or sleep.
.Then there was an interruption to the process when I discovered that my blood pressure, which is normally incredibly perfect, was going through the roof. I put my book and pretend option tickets aside and made my way to my magnificent cardiologist who saves my life regularly just with a hug and occasionally with an angioplasty and some stents. After reviewing every thing I had eaten, drunk, inhaled or coughed up for the past 3 days we were no closer to an answer till I thought to mention my new activity and, after he finished laughing, we decided that excitement and stress and naked puts can have a resounding effect on blood pressure, especially when the 2nd most exciting thing in a person's life has been hummingbirds for the past 2 years. Well, who knew?
So there you have it.......Lois is galloping off in yet another direction and who knows what adventures will ensue. Let us hope that bankruptcy won;'t be one of them
Next blog I will tell you all about bull call spreads and straddles and strangles and collars and some strategy I can't recall which is named after some kind of butterfly.....I can't remember how many legs it has and whether you can be assigned or exercised if you do it wrong. I think I will stay away from that one for a while. I certainly don't think I want to be exercised........I had enough of that with the broken hip and the damned physical terrorists.....and if you are very good I will tell you more about naked puts and calls.....I know that is really all you care to hear about.
And, please, either wish me luck or pray for me....probably both if you can manage it.
The New Yorker covers: August 18, 1975
9 hours ago