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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED
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To: freeus who wrote (4389)9/29/2000 7:54:05 AM
From: edamo  Read Replies (2) of 65232
 
freeus...."options action"

it appears you are buying calls when the volatility is higher then normal....this is typical as the underlying surges. as the stock settles a bit, even with added upward movement, the volatility normalizes and the option value decreases. the converse holds true for a down trending issue. the key to option trading, and it is a trade as it has a finite life, is to capture the volatility to your advantage. in fact you can buy an option or short an option at a point that even if the stock moves against you, the premium will move beneficial to you.

timing is everything with options....buy calls/sell puts when underlying oversold, buy puts/sell calls when overbought. to do otherwise increases the risk of premium loss...
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