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Politics : High Tolerance Plasticity
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To: Tommaso who wrote (1424)3/12/2001 3:38:41 PM
From: Ian@SI  Read Replies (1) of 23153
 
T.,

Agree that deep in the money options have very little time premium.

However, you're still paying $2800 or $2500 for $14000 of insurance.

If the market stays flat or goes down between now and expiration, you get your money back perhaps with a profit.

However, you're now fighting both the Fed and the longterm trend. I guess the logic escapes me for paying so much for insurance that is unlikely to be required; and that has about a 78% probability of complete loss of premium if held to expiration.

I readily concede that if you find this to be a worthwhile strategy, then so be it. For YOU!

Ian.
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