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The Options & Spreads article that follows has been written by an expert who trades successfully for a living. He also offers a course on trading Options & Spreads. For more info on the course click here.

The following article is very educational, informative and well-written.


OPTIONS & SPREADS:
Sonatas at Twilight & the Horse Parlor Stock Exchange

"When I found the skull in the woods," wrote Jack Handey, "the first thing I did was call the police, but then I got curious about it. I picked it up and started wondering who this person was and why he had deer horns."

So, he looked at the skull and insisted on seeing Homo erectus instead of roebuck, despite the evidence of the antlers. Was he any sillier than those who see hard-sell TV commercials for foreign currency futures and envision fabulous profits? Who disregard the evidence of sharp horns punching holes in one's bank account?

Penny stocks and IPOs, dot com offerings and electronic chat room recommendations, futures and options on items from rough rice to interest rates, S & P "spiders" crawling all over the financial channel commercial -- few hopefuls look at these skulls and visualize skeletons of bankruptcy. Certainly, hope is essential for speculative traders but too frequently, it camouflages bloody antlers.

Those come-ons in your mail do not help any. You know, the ones with buffalo-sized announcements of huge gains, the ones that make speculation sound like an easy-pickings gold mine with nuggets as big as your fist. The ones with the "warning of risk" that the law requires squeezed into the tiny type above the printer's name, a hair's breadth from the bottom of the page.

Yet, hope can have a solid, business-wise foundation. Veins of gold and silver are not imaginary and the individual sourdough can be the smiler in the assayer's office. Inescapably, it requires knowledge of topography and methodology, ways and means. Many venture forth with just hope and hype, expecting all nuggets and no rattlesnake. Fledglings perish and years-of experience veterans have little to show for it.

A solid, business-wise foundation can underlie both the hope and the "how to go about it." If everybody's "blueprint for wealth" reached the brick & stone stage, the street outside your window would be jammed with chauffeured Lincolns. Yet, some blueprints do work at the concrete-pouring stage, including for the individual trader who is not marshaling millions in a corporate treasury:

Using stock options, my blueprint is the Horizontal Calendar Spread. My "office" is my desk at home or my pockets; my "business phone" is often the street corner touch-tone. The amount of my own capital that I float is typically less than $1,500 per venture plus -- and here is a crucial ingredient -- several thousands of dollars of other people's money. I would stay the hell away from options but for that latter item.

Why? Because my carved-in-stone One Commandment remains the W. D. Gann Maxim: "Handle speculation as a business, not as a gamble." Spread strategy uses substantial quantities of other people's capital and therefore in my estimation stands as the most business-like form of speculative trading. Like banking & bookmaking, it requires seed money or an outlay but is mechanically geared to gather profitable spill-over from other folk's bankrolls.

Also, like banking and bookmaking, it often gains while those who put up most of the cash lose. Spreading is not risk-free but can powerfully reduce the risk in futures and options, two forms of trading notorious for producing the results of a "one medal per 10 coffins" type of battle. With spread strategy, usually the coffin train carries away others' lost dollars. That is why I would not touch stock options unless that strategy armed me.

I received a thought-provoking letters from a gentleman, a dentist in Illinois. He wrote that he would like to leave the dental profession and become a successful full-time trader. My reply was, "I have good vibrations about you. Yet, you and I may be working at cross-purposes. You want to leave the dental profession and I want to make trading more like the dental supplies business, i.e., more a business and less a crap-shoot."

Alas, the Gann Maxim/One Commandment everywhere gets mangled in actual practice. "Handle speculation like a business" is like saying, "Drink only in moderation." Everybody claims to be doing so but millions of people clearly are not. That dentist can probably handle trades in a scientific, business-like manner, but so many others - you would urge them to "handle it intelligently" but does any living being claim not to?

Recently I became involved in a brief debate-in-print, which turned to the subject of investments when I did not expect it to. A piece in the Wall Street Journal waxed eloquent over horse-gambling in a bygone era. I wrote a response, which the Journal published 6-1-2000

At the Track, It Ain't All Guys and Dolls

Ray Kerrison (Tastes Page, Weekend Journal, 5/19) sentimentalizes the old-time horse-players with the cigar in one hand, pencil and Racing Form in the other. Straight from the pages of Damon Runyon and Ring Lardner.

Not everybody is so nostalgic. I am not completely anti-gambling, since I had my first investment success with Atlantic City casino stocks & parachuted out before they plummeted.

Yet I stopped believing that "wisdom comes with age" as an eight-year-old kid, the son of innkeepers in 1950s pre-casino Atlantic City. I saw too many gray-haired racetrack suckers. Too many fellows in sports shorts told my Old Italian grandmother, "Sorry, Katie. I got no money for another night's rent. Lucky Penny ran too slow."

In South Philadelphia's Little Italy they had a saying: "The reason you never see any horse manure on the racetrack is that all the horses' asses are at the betting windows." Greg Donio - New York. That prompted a rebuttal from a West Coast man "eminent in the field." On 6-9-2000, the Wall Street Journal -- printed the following:

No Hot Horse Harrys

In response to Greg Donio's June 1 piece about seeing "too many gray-haired racetrack suckers," I invite Mr. Donio to a day at the races in the year 2000. He would find that the horses asses are where they belong, on the racetrack, and that the people at the betting windows are in possession of a large amount of horse sense.

Nowadays, the sports shirts and loss of rent money he recalls from his youth are the stereotypical exception, and not the rule; 21st century horseplayers today are not the hunch players of yesteryear, but rather studious investors who apply high-tech concepts to gauge each horse's capabilities.

If that sounds similar to choosing a stock on the basis of its fundamentals, that's because it is. The modern-day racetrack, racebook or Internet wagering outlet has evolved into a fast-paced and exciting financial market unto itself. I know. I have 25,000 nationwide subscribers who will attest to it. -- TOM QUIGLEY - Publisher - The HorsePlayer Magazine- Beverly Hills, Calif.

Isn't it nice to know that horse-players are "'studious' investors" and that betting the nags is like "choosing a stock on the basis of its fundamentals?" Is the pad & pencil roulette-player also applying "high-tech concepts to gauge" patterns in the spin of the wheel? Like the racebook (horse parlor), is the worn-out poker table and the back-alley crap game on concrete "a fast-paced and exciting financial market unto itself?"

So, you see the problem. Everybody but-everybody claims to be the "studious investor" with the "scientific approach." Every Internet gambler and card-playing patsy with a rabbit's foot thinks himself "the mogul" who "handles it like a business." This extends heavily to the fast-swing buyers and sellers of stocks, futures and options.

The fellow with the sure-thing horoscope guide, the trader in the throes of speculation fever whose hunches keep missing, the dabbler who expects to massacre the big boys and don't keep me waiting and don't expect me to strain my brain, the thrower of good money after bad, etc, etc. Every one of them a "brilliant tycoon" by his own estimation!

To me, "handling it like a business" meant (1) learning the details and (2) achieving realistic profits, not overnight wealth. It is the "gambling degenerate" of the casino or the racetrack who expects $500 to become $5,000 before the twilight beer flows. He is the last to realize that if that big a gain were that easy, every desperate wagerer like himself would enjoy valet service and maid service. As for learning the details, few avid gamblers know anything worth knowing even about gambling.

So for futures, options and other speculations, too often the years of experience have resulted in depleted checkbooks and no knowledge worth following. Gee, he must have learned a lot from all that trading activity. Yeh, follow his advice and you'll borrow money for groceries just as tasty. He would not ask the restaurant supplies dealer or the barbering supplies dealer for advice because their profits are not 1,000% in a day. Yet, if he imitated them at least a bit his pockets would be less empty.

Not all-bad trading advice comes from rag-pickers and obscurities. Articles appearing in Futures Magazine caused me to send the editors a critique, which they did not publish. Here are excerpts of what I wrote:

In your June, article "The Best Reads for Traders," using the word "read" as a noun ("a good read") smacks of saloon slang, which may be appropriate since much of the advice is near the cuspidor level. Among the "best" according to your article are a whopping four books by or about the "legendary" Jesse Livermore.

Jesse Livermore made and lost four speculative fortunes. In 1940, he wrote the book How to Trade in Stocks and in 1941, the wiped-out man put a gun to his own head. Advice-wise, he stands as the classic example of a baldy selling hair-grower. Yet, he keeps appearing on the very latest lists of "best reads" and "top 20."

In the same issue, "Ratio Retracements" by Cornelius Luca drew heavily upon W. D. Gann and his calculations with Fibonacci numbers. The great W. D. was "legended" to have made 50 million dollars as a speculator but nobody can substantiate this with paper documents. Still his lessons sell for hefty amounts.

As mentioned, they did not publish it. So, what was published in the issue most recent at the time of this writing? Page-35 in the August 2000 edition of Futures Magazine, a full-page ad: "At Last You can Discover - The Secret Trading Method That Made, W. D Gann Both Famous and Rich."

I found W. D. Gann worthwhile for his "trend-following" writings regarding stock price movements, ideas that he apparently borrowed from Charles Dow. Of course, his "Handle speculation as a business…" axiom is my Gospel, Hindu mantra and ethic wedding song. Yet, my skeptic's nerve was and is struck by the Gann Square of Nine, his Square of 144, the Biblical numerology and his other esoteric. It is unclear whether anybody has consistently made money trading with his methodologies but more than a few people have made dollars upon dollars selling them.

When you hunt for gold in rattlesnake country, you need a thorough knowledge of diamond-backs, sidewinders and two-legged snakes that "salt" the mines or sell apocryphal maps. The business section of the New York Post for August 10, 2000 contained the heading, "Report Shows the Dot-Carnage Is Spreading." It began, "The Internet fire sale is official. Forty-one Internet companies have gone belly-up this year -- and 83 others have withdrawn their initial public offerings, according to a report by webmergers.com."

The New York Post for July 17, 2000: "NASD Charges All-Tech, Stock USA with Trade Violations."

Dateline Washington -- Day-trading firms All Tech Direct. Inc. and Stock USA Inc. were charged by regulators with supervisory failures, including All-Tech's widespread use of allegedly misleading advertising.

. . . statements cited were that "day trading gives one unlimited earnings potential" and that "most of my customers have enjoyed successes virtually unheard of in the trading community."

. . . The NASD contended that All-Tech lacks supporting data and customer records to back these claims, and does not have written procedures for determining the accuracy of advertising statements.

. . . All-Tech also was charged with failing to properly supervise employees who arranged $131 million in loans between customers when their account balances fell below minimum thresholds.

Loans between customers circumvented the margin-loan limits. Buying stocks on margin could double the gain but could also double the loss if the share-price movement went the wrong way. Loans between customers in addition to margin-buying amounted to "deeper in the hole" loans, which often furthered the losses. This is a controversy atop the already-existing "tomahawk takes your scalp" day-trading controversy.

Yet, if you believe the advertising, the employees were remiss in their duty in not helping customers hire yacht crews with their immense winnings. Salted gold mines yesterday, misleading ads today. Has much really changed? Apart from the fact that the hunch-playing horse gamblers of long ago have been replaced by "studious investors" at the betting windows, has much changed?

Now as in the past, even the grandmotherly side of investing more than rarely gets hit with hailstones, some as big as baseballs. New York Post, August 12, 2000: "Malone, Amos Lose Billions on AT&T." The AT&T shares in the portfolio of entertainment mogul John Malone were worth $2 billion this past Christmas but are now worth just $I billion. The $26.3 million worth of the same stock held by former cable TV bigwig Amos Hostetter has fallen to $13.3 million. Everybody knows that, now as in olden times, you cannot lose with blue chips! Blue chips are as safe as a picnic and yield abundance like brimming picnic baskets. Yeh, right.

The Wall Street Journal for August 7, 2000: "SEC Acts at Cyberspeed to Halt Suspect Trades." Paragraph One: "On March 9, the Securities and Exchange Commission's Los Angeles office received a telephone tip that the skyrocketing stock price of a little Internet company called eConnect Inc. was being fueled by false press releases."

Things have changed so much since rumors over ale tankards affected the price of shares that were sold in taverns. So much is different since false messages went by carrier pigeon to Lloyd's of London. The bell at Lloyd's rang once for good news and twice for bad news. Some say all has changed.

Yeh, birds fly, not on the World Wide Web and not one brass bell rang at the Los Angeles office of the SEC. Bookie joints are now "fast-paced and exciting financial markets unto themselves." Yet, in risk trading now as in past centuries, a helluva lotta people get sneaky and a helluva lotta people get shafted.

Fake telegrams criss-crossing the nation used to juggle stock and commodity pries in 1900. Now Internet message boards and chat rooms make similar use of electric current. As a speculative trader, you have an obligation to know what schemers do and how, what strongbox can resist what bandit, what hand physical or electronic may pick what pocket.

Ponzi schemes and hard-sell schemes keep showing up in new disguises, sometimes on a computer or TV or sometimes on old-fashioned paper, ready to bankrupt more innocents. Can you pierce the disguise? A trader hunts gold in a land of danger and, whether he rescues a grandmother or protects himself, he must know all the hazards like he knows his own scrotum. He must be a mental encyclopedia of what to avoid and what can go wrong.

Now that you have looked at a few snakes not to be stepped on, let us address the technique of gold mining and nugget-hunting. Handling it like a business usually means having something to sell, whether ores and diamonds, apples from a cart or an architectural design, services as a tree surgeon or song-writer, or paper securities. Options are the focus of this article because something is true of them that is not true of stocks, bonds or CD's: With spreading, owning options permits you to create and sell more options.

Imagine if owning diamonds enabled you to create and sell more of those gems. Imagine if owning paper money enabled you to print and spend more dollars without going to prison. Imagine if owning common stock gave you the power to issue and sell additional shares. In other words, suppose you could have your cake and sell it too, then materialize and sell more a little later, and sell more still later without touching the original, then finally sell the original cake at your leisure. Would you call that a great business, a great bakery to own?

The business is not risk-free but a jewelry store or a food store that could do that would have a wonderful advantage. It would also be a fine risk-reducer in a high- hazard financial realm. A phrase heavily used earlier in this piece was "other people's money." It is the selling end of the enterprise that pulls that in. Shops do that, of course, but they must pay wholesalers. Being able to materialize jewels, cakes or options out of the mist would sure cut out most of the overhead, but it is only with the latter item that this can be done.

Let us look at the stock options page of the Wall Street Journal for August 4, 2000. Verio stock shares trade at 52-3/8. (Nasdaq symbol VRIO. This stock is mentioned here only as an example, not a recommendation.) A Horizontal Calendar Spreader looks only at "out of the money" options, which would include Verio call options with strike-prices above 52-3/8. Among calls with a strike-price of 55, those expiring in August (third Friday of that month) traded at 2¼ on August 4, those expiring in September traded at 3-5/8 on that same day, those in November at 4 and February at 4¼.

I routinely buy and sell options in groups of 10. Let us say that you bought 10 call options with a strike-price of 55 and the February expiration. Trading at 4¼ means one sells for $425 and 10 for $4,250. Owning one such option means that if the price of Verio stock rises to, say, 60 or 70 or higher, you are entitled to buy 100 shares at the strike-price of 55 between now and the third Friday in February. In actual practice, however, you would not need to buy the stock because, if the price of the underlying shares were to rise markedly, the resale value of the call options would swell to much more than $425 for one or $4,250 for 10.

Most options are never exercised, i.e. their share-buying call power never utilized or share-selling power never utilized if they are puts instead of calls. Options that increase markedly in value are resold at a profit without being exercised and, sadly, most puts and calls do not increase in value and are a loss to their holders.

Over 90 percent of all "out of the money" options expire worthless. As with futures, most who trade in them do not intend to exercise and, also as with futures, the scalped cavalry rate pushes 90 percent, i.e., graves on boot hill.

So how can options be termed a "business" with smoke signals like that? Remembers those 10 Februarys you bought on August 4th? They give you the right to create and sell 10 Augusts and, after they expire, 10 Septembers and, after they expire, 10 Octobers etc. Let us portray that in dollars.

Assume you paid $4,250 plus brokerage commissions to purchase the 10 Februarys. Instantly this allows you to create and sell either 10 Augusts for $2,250 or 10 Septembers for $3,625.

As mentioned, you can sell 10 Augusts and then sell 10 Septembers after the Augusts expire. Remember, however, that all options lose value with the passing of time. By late August, "time decay" will burn one amount or another off the Septembers' $3,625.

A pronounced drop in the value of the underlying stock could shrink part or most of the $4,250 off Februarys. Also, they will lose value with the passing of time but, at this point in time, more slowly than the Aug or Sept Options.

The fact that spreading is in essence a risk-reducer means, in this example, you should choose the Sept instead of the Aug for the first sale. The larger the proportion of Other People's Money in the mixture, the lower the risk. If you invest $4,250 in Februarys and sell Septembers for $3,625, you are actually risking only the difference or the "spread" between those two figures, plus brokerage commissions.

At this time, October options in that particular stock do not exist yet but will in the weeks ahead. The spread strategist holding the Februarys may sell Octobers after the Septembers expire, then Novembers after the Octobers expire. However, the "unknown factor" that must be allowed for is the price fluctuation of the underlying shares. A declining stock price could shrink every thing, which is why the trader should include as much of other people's money in the mixture as possible. A rise in the shares above the strike-price requires an early pull-out since a spreader is a seller of "out of the money" options and should not stand pat with unexpired "in the moneys." I tolerate "in the moneys" over night at most and often for less than a full trading day.

At the time of this writing, February is six months away and the "sold" options in the example much nearer. In other instances where the buy side and the sell side of the spread are just one month apart, my formula stated in previous articles remains ironclad: A sell side of 3 points or higher and a gap or spread between the buy and the sell of less than 1½ points. For example, selling out-of-the-money Octobers at 3¼ and buying Novembers with the same underlying stock and the same strike-price for 4-5/8. The 3¼ sell fits the "3 or more" criteria and the 1-3/8 spread or difference is less than a point and a half.

In spreads with which the buy end and the sell end are several months apart, I am a little more flexible but still insist on mostly other people's money entering the total via the sell end (mostly, that is, compared to the price you pay on the buy end) and by "mostly" I do not mean "only slightly more." In the Verios call option example just given, the Augusts at 2¼ points barely qualify as mostly, a thin sliver over half of the Februarys at 4¼. The Septembers at 3-5/8 constitute a far better "mostly."

I write as an active trader, not as a pure theoretician or a swimming instructor who never gets wet or a huckster of alleged "winning strategies" who keeps his own money off the speculative battlefield. Always some readers are shocked when an active trader who writes admits to having had a losing trade. Some think there exists an unwritten law that writer/speculators tell of their gains but never their losses. Not so.

My plunge struck dry rock recently instead of oil and the disappointment, though small-scale, is instructive. When Legato Systems shares were around the 20 mark this past April, I tried an experiment with fractional options. The strike-price of 50 was far above the stock price. I bought 10 Legato call options with a strike-price of 50 and an expiration date of June for half a point and sold 10 May 50s for a quarter of a point. The $250 from the sale of the Mays paid for half of the $500 that buying the Junes cost me. I paid the difference of $250 plus brokerage commissions. This Horizontal Calendar Spread was Horizontal because both sets of options had the same strike-price of 50 and Calendar because of the different months, May and June.

It was a total loss albeit a small total. The experiment taught me to be sure the value of the options on the sell side was multiple points, not a fraction of one point. It also taught me to keep my experiments small. Multiple points on the sell end of the spread mean more of that crucial ingredient -- other folks' cash. Make it a helluva lot more than a quarter of a point. On August 4 Compaq Computer stock sold for 28?. Among its out-of-the-money call options, Augusts with a strike-price of 30 traded at a half of a point, Septembers 30s at 1-5/16, October 30s at 2-1/16 and January 30s at 3½. Januarys may make a good buy but for the sell end of a spread, have an autumnal heart and do not look earlier than October. Harvest Sam's, Bill's and Edna's cash.

After the October expires, the trader owning the January can sell November and then December. However, he need not wait until the third Friday of October. The value of October will shrink substantially in late September. At around that time the trader could buy back the Octobers at a shriveled price and sell the meaty Novembers. If he waits longer than that, the Novembers shrink. Compaq call options are mentioned here as an example rather than put options because the underlying shares are gradual trending upward.

It is advisable that an option spreader also be a stock trend-follower. A call option spread belongs above rising shares and a put option spread below declining ones. The fact that a stock can turn around and keep going is why spread strategies are not risk-free and why other people should provide as large a portion of the capital as possible. Also, spreading means selling puts or calls to hopeful people, about 90 percent of whom will end up disappointed and with depleted checkbooks.

Merriam-Webster defines "wildcatter" as 1: one that drills wells in the hope of finding oil in territory not known to be an oil field; 2: one that promotes unsafe and unreliable enterprises; especially one that sells stocks in enterprises of this kind. In a sense, therefore an option spreader sell shares in wildcat mines. He makes money off the "studious investors at the betting windows," people who look at a skull, and see a man with deer's horns. He profits from "get rich quick" patsy's who turn to options instead of to phony Star of India gems and perpetual motion machines and "valuable real estate" where vultures roost undisturbed.

He gains off of dabblers and triflers who expect to make vast fortunes in less time and with less mental effort than they devote to selecting a suit of clothes. A day-trader or a penny stock venture fails at puts & calls before or after failing at something else. In the previous issue of CTCN, C. J. Casebeer asked annoyedly "'How many traders are spread traders?" My answer: There have always been more horse-players than bookmakers but who consistently takes home the profits? Now for some diversion.

A woman CTCN subscriber wrote to me, "I enjoyed your excerpts from Edith Wharton's novel The Age of Innocence in an issue last year, the one where a turn in the stock market sweetened the atmosphere in the opera boxes and the dress circle. Have you read John Galsworthy's books about pre-atomic age English gentry?"

I find Galsworthy's writing rather uneven and not much of it elegantly quotable. Nevertheless, The Forsyte Saga contains the section "Indian Summer of a Forsyte" with some fine crystal decanters of prose. The elder aristocrat Jolyon invites a young woman music-lover to dine with him in his mansion. The butler is in attendance in the dining room but no other company and the fare includes hock, a type of Rhine wine. John Galsworthy wrote (condensed):

The light was just failing when they went back into the music room. "Play me some Chopin," Jolyon asked.

. . . Irene sat down at the piano under the electric lamp festooned with pearl-grey, and old Jolyon, in an arm-chair whence he could see her, crossed his legs and drew slowly at his cigar. Then she began . . . He fell slowly into a trance. She was there, and the hock within him, and the scent of tobacco; but there, too, was a world of sunshine lingering into moonlight, and pools with storks upon them, and bluish trees above, glowing with blurs of wine-red roses, and fields of lavender where milk-white cows were grazing, and a woman all shadowy, with dark eyes and a white neck, smiled, holding out her arms; and through air which was like music a star dropped, and was caught on a cow's horn. He opened his eyes.

He felt miraculously sad and happy, as one does, standing under a lime tree in full honey flower. "Go on -- more Chopin!" She began to play again. This time the resemblance between her and "Chopin" struck him. The swaying he had noticed in her walk was in her playing too, and the Nocturne she had chosen, and the soft darkness of her eyes, the light on her hair, as of moonlight from a golden moon. Seductive, yes; but nothing of Delilah in her or in that music. A long blue spiral from his cigar ascended and dispersed.

In his syndicated column of August 5, William F. Buckley, Jr. complained and lamented that in the drives to uphold the various ethnic heritages, the white English-speaking ethnic tradition was being shunted aside. No doubt, the John Galsworthy novels give him comfort during a dark night of the soul. Buckley wrote this after the wrap-up of the Republican National Convention on TV and its "rainbow coalition" appearing on stage. Blacks, Latinos, Asians and women came forth one after another in an effort to portray the GOOP as "the party of inclusion" and "not just the white man's party."

Bill Buckley must have seen that convention on TV. Again and again, the cameras panned to the delegates in the galleries and showed acres upon acres of white male faces wearing 10-gallon-hats. Certainly there is an Anglo-Saxon cultural heritage and a white Protestant English-speaking ethnic tradition. But really, Mr. Buckley, how much could those Wasp delegates in cowboy hats have told us about English Restoration drama or the music of Benjamin Britten?

A recent book receiving much attention is How I Accidentally Joined the Vast Right-Wing Conspiracy (and Found Inner Peace) by Harry Stein. It purports to list several "tell-tale signs" for determining if you are "turning to the Right." For example, you hear someone talking about traditional morality but you do not assume he is a religious fanatic. You are actually relieved that your daughter plays with dolls and your son plays with guns. It annoys you that Black History Month seems to run from February through July. I can think of "signs" he fails to mention.

Pardon me for being the proud paisan, but people with an ultra low saturation point for Black History never seem to have a high one for Italian music from the candlelight era or paintings from the Dutch & Flemish Golden Age or classical Greek drama. So face it, it is a "tell-tale sign" of Right-Wingedness if you call yourself a "traditionalist" like God gave you the word but your "cherished past" contains more singing cowboys than Florentine artists.

It is another "tell-tale sign" of Right-Wingedness if you yank the trigger on the censorial side of the "Culture Wars," blaming movies and rock songs and video games for anti-social behavior, youth crime and bad sex. Anybody who has been to the grand opera knows that Puccini's Tosca did not provoke seduction and stabbing, torture on a rack or high-leap suicide. Anybody who has been to the art museum knows that nude Salome carrying the severed head of the Baptist on a silver platter did not compel schoolgirls to strip naked and chop off heads. But this means little to "good old days" conservatives who dread anything stronger than Doris Day movies and Moonlight Bay songs.

Harry Stein's book is only mildly negative toward ethnic diversity but that is becoming a Cardinal Sin to the one-culture New Right. In the conservative and Buckleyite flagship magazine, the National Review of April 3, 2000, John O'Sullivan's "Advice for George W. Bush" piece called ethnic diversity "a bastard ideal" and Sullivan complained, "Under diversity, different ethnic groups fail to melt into one another to produce an American ethnicity. Each group retains its own culture." Bad, says he. That is one gripe that George W. Bush will never quote while stumping for the ethnic, immigrant, and minority "swing votes."

If you take the notions of "tradition" and "heritage" farther back in time than Shirley Temple and Tin Pan Alley, you arrive at ethnic and cultural pluralism -- French salon paintings or music by Massenet, Spanish architecture of the Alhambra, the Dresden art treasures. In contrast, the one-culture Right hugs a "golden yesteryear" that is pretty recent. Try finding a Venetian artwork or a Rachmaninoff rhapsody in the Wall Street Journal writings of Judge Robert Bork or critic/author Michael Medved when they cheerlead for return of 1930s movie censorship, or other conservative writers when they crucify rock songs in favor of "Pennies from Heaven."

The Wall Street Journal carries brilliant articles on fine art and classical music. However, all its "Culture Wars" pieces seem to be written by people who avoid the art museum and the opera house like hillbillies avoid a bathhouse. Surely, the diamond stickpin mogul of the carriage-trade era who skimmed the cream of culture must have heirs of the spirit. Today the Wall Street suits and the country club Republicans who know some artistic heritage or should know it never seem to get a voice in the Journal. Are they silent when they should not be? Are you, dear reader?

Is ethnic diversity "a bastard ideal?" Better not let anybody take a magnifying glass the pedigree papers of the one-culture Right Wing. If their claim to "time-honored tradition" looks doubtful on the page, it looks even worse in the opera house.

The 1953 movie Roman Holiday won an Academy Award for Audrey Hepburn and was shot on location. Inside Italian palaces and mansions, however, elaborate camera angles were used to prevent nude statues and paintings from appearing on screen. You should make it a point, dear reader, to view some sensual artworks by Correggio and Boucher. Make sure they do not cause art patrons to collapse into quivering blobs of lust. Then -- no joke -- please write a letter to the Wall Street Journal stating that there are two sides to the "Culture Wars" and that not everybody thinks the Golden Age of Film Censorship (Bork's phrase) was the zenith of civilization.

Music by Debussy on your CD player can feel enriching when you look over trading-related papers in the evening. See if it's effect on you is anything like that of Chopin on Galsworthy's aristocrat at twilight. Do not assume that somebody else is the tycoon who knows artistic heritage. An awful lot of "somebody else's" are not. You be the one.

Also, do not assume that somebody else is handling speculative trading in a business-like manner. You be the one. Otherwise, the short list of those who do gets shorter.


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