Hi ed, I must be dense this morning, and really want to understand this.
QCOM, in the period before the 4-1 split, had rich premiums on the much-in-demand options. After the split, and with the retracement of the stock, the air went out of the options so to speak, which I understood as a combination of so much greater liquidity, both in common and options, so many more of them...as well as decreased stock price.
In this case, I understand that JDSU is a hot stock, so when leaps are announced in May, especially if there has been other news this spring as you note--what happens to the calls/puts we've sold? Obviously many would play the leaps (I'd buy calls most certainly), so does that mean the options we hold decay more quickly, and the puts we've sold profit more quickly, while any calls one holds (I bought a few September 250s a little while back) also deteriorate? This time I want to be prepared-- |
