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Strategies & Market Trends : Option Simulator / RT

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To: jim quiz who wrote (26)7/23/1997 6:17:00 PM
From: Harold Lanier   of 31
 
Jim,
I did a bunch of discussion on volatility on the thread
Subject 9870
several months back, might be interesting to read. If it wasn't in there then it was in the thread called something like the Wonderful World of Options.

As non institutional traders we basically have two methods of trading options. Predict price movement or try to let time decay peck away at premium that we have sold in a position that price movement has little effect. If you sell premium you want to get as much money as posible up front. This would be when volatility is high, then you wait until volatility dies down or expiration and buy your positions back. It certainly is not as glamorous as trading price movement but if you want to peck a little here and there it can be done. I am not very good at it yet, but as I said in NJ this is the direction of my learning efforts.

Be certain to understand that Volatility does not determine or predict direction of the move.

Harold
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