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Strategies & Market Trends : Swing Trading With Options
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To: Teresa Lo who wrote (55)8/22/2001 7:11:45 PM
From: Dan Duchardt  Read Replies (1) of 88
 
Hi Teresa,

Good of you to stop by our little thread here. I try to keep up with your posts over at 20/20 Insight: Trade Smart, Not Hard

Subject 36945

Not enough hours in the day to keep up with all I'd like to. :( Thanks for posting the example from your site. Always nice to get those multi-day swings, especially when you are on the right side. The protection of properly managed options is a real plus.

I've had an interesting situation over the last few days with a QCOM SEP65 put. I paid fair value of 6.00 for it on Friday with QCOM at 62.50. Today at the close QCOM is at 63.75 (a change of 1.25 from my entry) and the inside ASK on SEP65 is only 4.50 (4.60 is the worst) or 1.50 less than I paid. The best bid is only 4.30. The price of the near ATM put has moved farther than the underlying stock, and that's not counting the loss to the spread, when it "should" have moved only about 1/2 as much. The price of the calls has dropped in a similar manner, with the implied volatility going from 62% (the average for QCOM) down to about 50% in a few days. Do you know of something that commonly happens around the time an option changes to "front month" that would account for the sudden collapse in volatility?

TIA

Dan
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