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Strategies & Market Trends : Options
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To: taxman who wrote (1192)1/17/2000 5:23:00 PM
From: Uncle Frank  Read Replies (1) of 8096
 
>> i haven't had a chance to read the roth book. does he give a reason for in the money versus out of the money? as i have stated previously, i usually buy as far out in time and as far out of the money as i can.

Roth points out that DIM LEAPS have a very high delta, so they track almost 1:1 with the movement of the stock. As a result, and since they cost about 1/3 of the underlying common, they be used as a low cost stock surrogate. Another way of looking at it is DIM LEAPS provide you a leverage factor of 3 over owning the stock itself.

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