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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: NOW who wrote (20691)9/22/2000 1:47:11 AM
From: IceShark  Read Replies (2) of 436258
 
he was just using caps for the Implied Volatility of the option's pricing. The price of poots, in this example, are going to go waaay up tomorrow, compared to today or yesterday because the odds of them actually paying off just got better. -g- This is outside of and beyond any changes in the underlying's actual value.

That extra vol could evaporate pretty quick, which is why he is thinking about selling poots to capture the possibly evaporating IV.

If you want to see real life vol pricing in action, go back a couple weeks and look at poot prices for a front month strike 10% out of the money on dhell and say, FleaBag or Rambo. Quite a difference. That is how I lucked out and caught dhell for a 22 or 23 bagger.
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