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Strategies & Market Trends : Options
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To: Poet who wrote (5981)4/4/2000 7:28:00 PM
From: Tim O.  Read Replies (1) of 8096
 
Poet,

thanks for your response. this is a good thread.

interesting about the option price vs. theta correlation. i need to study delta, theta more. i would think though that 15-20% ITM options would have a smaller time premium vs. intrinsic value. so given a small change on the stock price, time decay would have a smaller effect on the ITM option price (compared to OTM).

for fast action, like your BRCM puts, the delta on ITM was certainly to your advantage.

it's vastly more profitable to write options on the front month, as that's the month with the highest theta.

sounds good. what do you mean by front month?

appreciate the discourse.
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