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Strategies & Market Trends : Options
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To: Jill who wrote (2243)2/4/2000 12:14:00 PM
From: edamo  Read Replies (1) of 8096
 
jill "bad for calls"

again all is relative....best to buy ditm when oversold, but if upside move causes inflated volatility, the an exaggeration in call premiums will occur....the downward move may in fact cause the sometimes extraordinary call premium to deflate when it normalizes.....the only question you must ask in a call buy is simply "will the price of the underlying ever be above the option strike plus premium paid prior to expiration" if the answer is yes, set the position at a price that will satisfy you. can't catch the top or bottom....
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