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Strategies & Market Trends : The Options Box

QQQ 605.75

-1.7%

Feb 4 4:00 PM EST

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To: robwin who wrote (7706)	11/29/2000 7:29:27 AM
From: Poet	Read Replies (1) of 10876

Hi Rob, Another good question. And I see YYB (no dummy herself) has already given you what seems to be the most likely answer. I just looked at the TXN chain and I see what you mean. The 42.5's would've yielded you about $2. The 45's are already hovering around $1 and, IMO, are not worth writing. The reason for this is that, once an option reaches the $1 range, it takes forever to decay down to zero. You may want to take a good look at the $40's today. Given the downward trend in the market and the negative futures on the Dow this morning, I'd feel comfortable writing the $40's for a trade. You'd pocket roughly $300 per contract and can sit on the covered call through the weekend, letting time decay work its magic. You can buy them back at any time prior to expiry, say when the value reaches $1 to $1.50, and you'll have pocketed more than having written the 45's today. I hope this helps.

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