Play It On Paper- Clappy's Newbie Option Thread Message Board

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Pastimes : Play It On Paper- Clappy's Newbie Option Thread

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To: David Cecil who wrote (70)	7/25/2000 9:16:15 PM
From: hlsjones	Read Replies (1) of 176

David Just a comment - If you check the thread you will see my other messages to clapper. All of them deal with options in some way or another. You should not limit your options to cheap. The cheap ones are the ones that lose money about 85% of the time. You need to sell these types of options not buy them. The more expensive options will put you in the money and you can read that as safety margin. For instance, suppose a stock is selling for $23 and the $25 call, front month, is selling for $2.50. What that means is that you need the stock to go up to at least to about $26 or $27 to get even a 1$ or so appreciation. If, on the other hand you buy the 20s for say $5 you will see an almost 1:1 ratio between the stock and the call since it's in the money. If you really consider options "gambling" you need to re-think your methods. I play options all the time and there is no more risk, usually less, than buying the stock. If you did not read my long post to clapper last weekend, please go back and find it. I think you may find it exciting at the very least. Harry

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