<<Jerry Miller, an options trader I respect a lot, pointed out the QCOM 2002 50 strike LEAPS, currently about $70. >>
Poet:
Very interesting. Could you (and others too) help me figure out the following:
Assume that Q trades in a range of 88-130 from now through early to mid-March.
Would it make sence to take a July 175 position, bought ATM on 1/3/2000, which is down 75% from the initial premium, and buy one-half the number of contracts in an ATM position w/ the same expiration month?
My thoughts are yes because if Q does not ralley until mid-March, all of a sudden my entire July 175s are nervous and NEED a strong rally.
If I roll them down, even though I only own 1/2 the number of contracts, and am not getting as good of a rate of return as the 175s (if there is a really strong/typical Q rally), they are protected if the stock is only around 150.
Thanks for the advice.
Noah |
