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Strategies & Market Trends : The Covered Calls for Dummies Thread

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To: alanrs who wrote (1372)	7/9/2001 9:37:40 PM
From: Dan Duchardt	Read Replies (1) of 5205

ARS, I would expect that if the stock remains roughly flat, the option will lose about .35/day. FWIW, according to QCharts (actually RavenQuote fed by QCharts) the current rate of loss of time value for the JUL45 is .14/day. This pretty much agrees with a projection by the Options ToolBox (free from CBOE) that by Friday the theoretical price will drop about 5/8 to around 1 7/8. Of course, price variation could easily bring it the rest of the way to your target prices, but the .35/day for time decay only seems a bit too optimistic. I just started playing with the toolbox position analyzer over the weekend, but it lets you do some nice "what if" estimates based on price and date assumptions you control. I don't know if there is a new version out. The one I have (3.0) still works in eighths and does not allow volatility to be greater than 100, but 100 is real close for the SEBL JUL45. That much volatility is probably going to make this thing carry significant value into next week, so I tend to think the projection is reasonable. Dan

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