Ligand (LGND) Breakout! Message Board

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Biotech / Medical : Ligand (LGND) Breakout!

LGND 189.93

+0.5%

Jan 2 9:30 AM EST

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To: Josh C. Pleasure, M.D. who wrote (3571)	6/17/1997 2:58:00 AM
From: Skeeter Bug	of 32384

>>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.<< doc, you lost me. if you buy the $10 calls and they expire at 10 then you lose 100% of your investment. you've lost about 30% if you own the stock. your 100% loss is guaranteed. the 70% left over in the stock can get great annual returns going forward. investing is a % game. options are very risky and you have to have a detailed and well thought out system to minimize this risk. you can do this and it sounds like that is an assumpton in your statement that you didn't mention in your note. it is wise to articulate any assumptions lest somebody misconstrue what you say and find out that they didn't lose $3.50 - they lost all their money! good luck... i'd be interested in learning the details of your system.

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