Options Message Board - Msg: 12438081

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Strategies & Market Trends : Options

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To: Jeffry K. Smith who wrote (481)	1/2/2000 3:14:00 AM
From: Girish Patel	Read Replies (1) of 8096

$185 "decisively" (with volume) because that will be a breakout from previous resistance and assure an upward price movement. I do not know the delta and do not care much about it - it keeps on changing with the price movement any way. Once the call option is in the money, it will move much quicker with higher delta and put option price will drop equally faster. Calls and puts do not necessarily move with the same delta. Again, may be someone will calculate Delta and volatility and such. "Double your profit potential" because you are making profit from both long calls and short puts. You can simply buy twice the number of calls, but your money at risk is higher. For example, buying 20 calls will cost you $120,000 and for a synthetic long you only need about $60,000 in margin. Buying 1000 shares will cost you $185,000. Not much of a contest there. If QCOM simply moves 50% per year, your 10 call options will be worth $231,250 at expiration. You will keep your margin money so the profit is free money to you. There is no limit to your profits if QCOM repeats 1999's performance. I hope I am making sense to you. It is late night and I need to clear my head from champagne and wine and martini as well (LOL)

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