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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: rydad who wrote (2179)8/22/2001 9:05:48 PM
From: Dan Duchardt   of 5205
 
rydad,

FWIW to anyone here involved in QCOM, there has been a substantial drop in QCOM premiums for September options since last Friday. That's great if you sold calls already, as many of you do here. I can't tell you if they are going to come back. Friday, the SEP65 put best offer was 6.00 with the stock selling at $62.5. At the close today, the offer is down to 4.30 with the stock closing at 63.75. That's a 1.70 move in the options (and I'm not counting the spread) while the stock has moved only 1.25. It's not quite that bad for the SEP60 puts, but the time decay in these few days has been outrageous. I have no way to predict where it will go from here, but today the implied volatility for near the money is averaging around 50%, and that is way off from where it has been recently The three month historical volatility of QCOM is 65%, and for July it was 81%. Of course all this shrinkage all happened while I was long QCOM options. I'm short now, so it will probably go back up <ggg>

Dan
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