Interesting, Tom.
The point about calls: yes and no would be my practical answer. I think I've mentioned earlier that even if I'm using calls for a very short-term trading strategy (as in OTM sebl or ntap) I don't do the front month. I went out to Sept, Nov, in those cases. Or, I had also bought SNDK Oct 100--at the time, ITM, slightly; now OTM, slightly. But I do this to give me time to ride out short-term volatility. I pay the extra premium, and admittedly, as time advances I lose some of that value.
Let me give some real-time examples. Thus for instance in the last 5 mos I have traded in and out of, profitably, \from 100-500% gains, GMSt May 45s, May 60s, and August 85s, mostly in my IRA & KEOGH. I recall when I did the latter, someone on this thread asked me why. Every time I'd bought, I'd bought months out. I still own Aug 75s, a "wee bit" in Poet's words, and they originally cost me 7. I just checked my Fidelity account and they're 3. However, if the deal goes through in June or is even delayed a bit, I expect they might suddenly become quite profitable again.
So...it obviously depends to some real extent on your choices-- |
