Peter,
One condition I employ on all my options tranactions, whether doing short term puts/calls or leaps, is that I will do in the money, or maximum one strike out (sometimes two if its a net stock or a hot stock that moves like QCOM). I often try to open call positions for short term trades, but for my risk tolerance, I don't like doing anything less than a couple months out, so as far as April goes, I like it. One thing you should be careful about though is that the premium on MSPG options are normally quite high but the good thing is that they do move them well when the stock gets some volatility.
If I were going to open a call position (and by no means am I an expert), I would be inclined to look at the 25s or the 30s (MQD DE and DF). DE's have a delta of .95 whereas the DF's have a delta of .55
You may be wondering why I didn't suggest some really cheap calls that are way out of the money. My rationale is that you will get a one for one move in either of the above call positions when the stock moves beyond the upper end of its intermediate trading range of 32. Sure one cane buy the 45 or 50 April calls really cheap, but I believe thats way too risky. In an options trade, I'd prefer safety (particulary when doing net stocks) more than anything else. I'm certainly no expert, but if you need any help or if you want some clarification on anything, let me know. Best of luck.
Regards,
Hasan |
