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Strategies & Market Trends : Options
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To: Jill who wrote (442)1/3/2000 10:45:00 AM
From: John Walliker  Read Replies (1) of 8096
 
Jill,

Can someone explain what is eluding me?


Risk and time value.

DITM calls provide an inexpensive proxy for the shares as they have low associated time value and volatility components.

OTM calls are a potentially very profitable gamble where you will either make a lot or lose everything.

John
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