The Options Box Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Options Box

QQQ 629.07

+0.5%

Oct 31 5:00 PM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Poet who wrote (10743)	5/7/2001 4:26:45 PM
From: smchan	Read Replies (1) of 10876

Poet, thanks... I like your idea of not writing LEAPS in order to squeeze more out of a stock. My only reason for considering LEAPS is that this particular account is particulary small, and (at least for my example CSCO) I need a fat premium to even buy the stock. (The account is about $1,700 - an education IRA to which I cannot contribute more until next year - and I'd have to simultaneously buy the stock and sell the call to have anything that cost over $17/share.) I think I'll focus on sub-$17 stocks; maybe even find a couple sub-$10 stocks with fat May or June premiums instead. There are some good ideas here: coveredcalls.com but what stocks I do recognize I'm not sure I'd want to be even a 60 day investor in. I'd look for hedge wrappers but cannot buy puts in the IRA. :-( Then again, it's hard to refuse a 24% premium (LNUX @ 5.48, Jun 5 NUUFA at 1.30). Shoot... if that kept up, I could have a basis of $0 in 4-8 months. Is that an unreasonable expectation? Do options with high premiums tend to have high premiums in the future? (I am honestly surprised to see junk like LNUX have such a high premium when my DIS practically has none.) Will DD IFMX as another poster suggested earlier... Sam

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next