We will give you some examples as to where Puts and Calls could have been bought on
U.S. STEEL to advantage:
1932 – May 7 to June 28, high and low on U. S, Steel during this period was 31½ and
21¼. When Steel declined to around 22 you could buy Calls because the low of 1927 vas at
217/8. You could probably have bought a Call at that time at 25 or lower, or you could
have bought a Put and bought the stock against it. Another way to trade would have been to wait until U. S. Steel crossed the top of 32, which was above 7 or 8 weeks’ tops, then
bought Calls. In 30 days it advanced to 44 and by September 6 advanced to 52½, giving n
possible profit of 25 to 30 points on Calls.
1933 – July 18, U. S. Steel advanced to 67½ and by July 21 declined to 49, down 18
points in three days. A Put good 7 days or two weeks at that time would have made good.
However, when it was around the high levels, if you had bought a Put good 30 days, you
could have made profits because the stock declined again to 49 on August 16 and never
rallied above 58 until it declined to 34¾ on October 21, 1933.
1935 – January 8, U. S. Steel made high at 40. march 18 declined to 27½. This would
have been a. place to buy Puts or Calls because it was a double bottom against a low made
September 17, 1934, when Steel sold at 29¼. You could have bought the stock and bought
Puts as protection, or you could have bought Calls, or you could have waited until after U.
S. Steel crossed 40, the high of January, and then bought Calls. After it crossed 40, it never
sold at 40 again until advanced to 72 on April 9, 1936. Thus, you can see that if you had
bought stock and bought Puts or bought Calls and once had profits in them, you could have moved up the stop loss order to protect the profits and carried it for big profits.
1936 – April – You could probably bought Puts on U. S. Steel good 30 days around 66.
Within 30 days it declined to 54¼, giving an opportunity to make a profit of 10 to 12 points
in 30 days.
October 3 to January 9, 1937, U. S, Steel held fn a range from 72 to 80, or four months
in an 8-point range. When Steel narrows down for several months like this, it is getting
ready for a big move one way or the other.
On November 23 when it declined to 72, it was at the old top of April 9, 1936, a
buying point, or a place to buy Puts and buy the stock, or to buy Calls, out a better time and the surest place to bay Calls was when it crossed 80 on January 7, 1937. You could
probably have bought Calls at that time at 85 good for 30 days. The last low was made at
79 0n January 12 and in 30 days or February 11 U. S. Steel sold at 109½, giving a possible
profit of 24 points. With the Trend still up you could probably have bought Puts at 5 points down to protect your profit and hold your stock. You could also have bought Calls good 30 days.
1937 -March 11, U.S. Steel advanced to 129½, up 57½ points in 60 days. Thus, After
the long period of dullness in an 8-point range, you had an opportunity in 60 days to make profits of over 50 points by buying calls. Then, after this rapid advance you could have bought a Put. On March 22 U.S. Steel declined to 123 ½, lower than the first top. This
would have been the time to buy Calls and go short because it was near the old top, or to
buy Puts. You could probably have bought Puts at this time around 117. Thirty days later
U.S. Steel was down to 99. Then, if you were short on Puts, you could have bought a Call
to protect your profits or placed a stop loss order to protect your profits. On May 18 U.S.
Steel declined to 915/8, down 32 points in 48 days. This shows you that when activity
follows a long period of dullness there are big opportunities for making large profits on
small risks in Puts and Calls.
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