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Politics : Ask Michael Burke

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To: Tommaso who wrote (94329)2/2/2002 2:28:12 PM
From: Don Lloyd  Read Replies (1) of 132070
 
Tommaso -

Well, any other options I have bought, since they were American-style and could be exercised any time, had a time premium that decayed and thereby added to the risk of the option.
The European-style LEAPS have developed exactly the opposite valuation because they can't be exercised until expiration, and therefore the "decay" is in my favor.


You may not be reflecting what you mean by what you say here, but it is always the option or leap seller that is favored by time decay. Of course, your own expectations will have to determine whether a given time premium is too much or too little, whether you are buying or selling.

Good Luck, Don
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