Hi, as someone who submerged herself in Qualcomm calls this week, and took a position in GMST recently, and GMST calls earlier this week (May 90s when they were OTM, now they're ITM), I can say that...
I love PMS Witch's post about options over on the MSFT thread, and I paraphrase here:
1) If you think a stock's going up a lot, buy calls
2) If you think a stock's going up a little, sell puts
3) If you think a stock's going sideways, sell covered calls
40 If you think a stock is tanking, buy puts.
Qualcomm is going up a lot, so people this week were buying OTM calls and watching them pop and turn ITM in a day or two. It was enough to make you faint. It's exciting but could get dangerous soon.
Gemstar is going up but not at that pace right now. Maybe later. As another poster here said to you, selling puts is also a nice way to scalp $, or get equity cheaper if you want. So you might want to buy calls but not that far out of the money, or even better yet, slightly in the money, and May is probably far enough out to make a good profit (though one can never tell!) Qualcomm is another story, and I hardly can believe it myself, and I learned more this week on the Q thread than in the last 6 months at SI! |
