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Biotech / Medical : Ligand (LGND) Breakout!
LGND 200.290.0%Jan 8 3:59 PM EST
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To: Andrew H who wrote (3570)6/17/1997 2:14:00 AM
From: Josh C. Pleasure, M.D.   of 32384
 
Actually, there's only slightly more risk in buying deep in the money calls than in buying the stock.

If the stock is $13 and you buy a $10 call for $3.50 and the stock is $10 at expiration, you lose only $.50 more with the options. Say the stock goes down to $9. THen you lose $4 on the stock and $3.50 on the option.

Of course, if the stock goes up, you could have about 4 times the return for the same initial price.

One disadvantage is the extra commissions involved in buying new options every 6 months or so.
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