E*Trade (NYSE:ET) Message Board

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Non-Tech : E*Trade (NYSE:ET)

ET 16.43

-0.5%

11:56 AM EST

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To: SLSUSMA who wrote (12680)	3/21/2000 1:04:00 PM
From: BWAC	Read Replies (1) of 13953

You CANNOT analyze the price, risk, value, chance of profit on any OPTION without FIRST considering the price of the underlying stock. No way, no how, you are completely wrong and misdirected. When you buy or sell any option you look first and foremost at the price of the stock. Then you look at the price of the options. EGRP at 27 to 28 offers no reasonable opportunity to buy or sell an option. Options should have been sold for 3 1/4 when the stock crossed 30, and bought for 5/8 when it was 23 weeks ago. Better yet the 25's were what should have been bought. Then the 30's could have been sold against them. Buying 30's now leaves you 17 % off of break even. Selling 30's gets an insufficient premium to offset the risk EGRP moves higher. $27 is a bad place to mess with options. But that's exactly why you are here. To promote risk filled trades which further your personal agenda. A profitable trade is not necessarliy a smart trade. It just might be luck. You would do well to add a healthy dose of risk analysis to your trading.

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