>>Puzzled on option prices...
Me too.<g>
Actually, there are two elements you might consider for the decline in your calls. First, options are a 'wasting' asset, so the five days that elapsed will account for some of the decline despite the underlying stock's advance. More likely is a decline in the implied volatility used by the specialists to calculate prices. Don't read anything nefarious into this--when the market starts going all 'one-way', we move the implied vol to try to bring buying/selling back into balance. Simple case of supply and demand. I would love to have my Ballard premium back at the lower vol at which I sold it.
I haven't had my first cup of coffee yet, but if memory serves, the first Januarys are listed at the May expiry. ABX, for example, would then have 6,7,10,1. Classes on other cycles will not have Jans until later. Of course, the '99 Leaps are all Januarys. (I just re-read that; of course, ALL Leaps are Jans).
Speaking of ABX--nice little rally yesterday. Just when bullion looked like it had broken down below the $292 support level, oil prices spooked it near the $300 resistance. Anyway, I wrote off 100-odd Mar 27.4s on Friday; same with Inco. Oh well. I also got to say good-bye to those little rolling sticks of dynamite known as March Ballard puts.
Happy trading.
Porter |
