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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)

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To: satish kamat who wrote (1638)9/16/1999 7:30:00 PM
From: Madpinto  Read Replies (2) of 2241
 
The more out of the money the calls are, the more leverage you have. However, with OTM calls, the stock needs to go up more to break even. I suggest manually calculating the risk/reward of different strategies using a fixed amount of money. It won't do you any good to compare a strategy requiring $100 with one that needs $1000. Chart different stock prices and figure out how much you would make at each level. Try to decide where you think the stock will go and check to see which plan works the best.
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