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Strategies & Market Trends : Options
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To: Jill who wrote (432)12/31/1999 9:31:00 AM
From: surpow  Read Replies (1) of 8096
 
<<I've been reading the GMST thread and thinking about GEM and want to add to my position with more of the GMST May 60s or else maybe Aug 60s. It could really break out in 2000. Thanx for the tip.>>

Jill:

I too am long Gem*, w/ the AUG 75 CALLS, a position I took on a dip last week.

I am curious, why you would be buying contracts that are ITM when you expect the stock to break out in 2000? If it does break out, wouldn't it be more profitable to buy OTM?

As I understand it, time decay won't set in until 3-4 months before expiration, giving lots of time to roll further out if the stock doesn't make a move.

Any thoughts would certainly be appreciated. I am a full on newby to options trading and have been so lucky w/ QCOM calls. I don't want lack of experience to give back my recent gains.

Thanks, Noah
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