Options related post:
Freeus, re: >Would you say the criteria for a stock to be an "options" opportunity is the same as just buying a stock?<
I would say yes, in general. But let's take USRX. I don't currently hold any options in USRX because it is not clear to me that USRX will under "normal" market conditions be at a certain price by a certain month. However, I do hold shares in USRX. In my opinion, a stock which is an options opportunity is one that has strong fundamentals, bright prospects, and NO negative issues surrounding it, with none in sight. Plus, the stock should be a "good value" (ie low PE compared with historical norm for industry) that the market will sooner or later get around to bringing up to fair market value. In other words, a "screaming buy".
Re >Also how long do you have usually before the option expires, or is that strictly the buyer's choice?<
You will see the different expiration months available for the stock's options when you go to a site like Lombard.com. Rule of thumb advice from Mr. O'Neil, founder of IBD: Buy the longer term expirations. Mr. O'Neil recommends a minimum of 6 months out to expiration, to give your stock a chance to perform the way you think it should. It's good advice, because it takes heaps of pressure off you, and it can be just as lucrative as short-term expirations and more, if your stock performs as you estimate. But, more people buy the shorter-term expirations.
You can sell your stock options at any time up through the 3rd Friday of the month your options expire.
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