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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Dan Duchardt who wrote (1395)7/10/2001 6:21:23 PM
From: alanrs   of 5205
 
As always, thanks for the thorough response. Most of my trading has been done with options 3-4 months out, where virtually all of the movement is tied to the underlying. I have only used the $/day calculation as a way to roughly compare options of different stocks or different expirations for the same stock, looking for an "apples to apples" comparison. I believe I have a reasonably good feel for this. It's really nothing more than buy low, sell high, except in reverse-sell high, buy low, and keep half an eye on the clock.
Uncle Frank, on the other hand, has mostly (I believe) sold near month calls where the time premium predominates, and he seems to have a good feel for that. I was (and still am) trying to see what that is about. It's sell expensive time and mostly don't buy back.
Then of course there's ATM and ITM, neither of which I have begun to think about, but seem to be a little different from either of the above.
I really need to be laid off so I can read Macmillan and play around with the various options sites. Maybe this winter.
The one thing I have suspected and that you seem to confirm is that options are priced fairly inefficiently. I guess I would expect that just from the fact that the volume is so low. Good to see one can get price and time info on options, should I ever need that. Quicken doesn't even recognize them to update end of day prices.

ARS
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