Gorilla and King Portfolio Candidates Message Board

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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Wyätt Gwyön who wrote (3932)	7/17/1999 3:49:00 PM
From: Wyätt Gwyön	Read Replies (1) of 54805

I wrote: "What that means, obviously, is that if the underlying stock price doubles, the value of your in-the-money options should sextuple, minus the decrease in the value of the time premium." That's inaccurate. I should have said that, because the in-the-money portion of your contracts rises dollar for dollar along with the common (minus the decrease in time premium value), a doubling of the stock would represent a 300% appreciation of your original capital invested in the LEAPS (minus time premium erosion), vs. a 100% appreciation if you just bought common.

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