To All, anyone,
I have been trading stock now for several years as some may know, but now I think it is time for some calls, Leaps for Jan 03. I scanned this data earlier and just wanted your thoughts as to my understanding.
This data is from the CBOE.
Please correct me if I’m wrong.
Jan – 03 Calls with a strike price of $40.00. The premium is $7.40 each in a lot of 100 shares.
So, if I wanted 20 calls for Jan 03, than the 20 calls means 2000 shares each costing $7.40, or $14,800, the seller will hold 2000 shares at a cost of $40.00+$7.40=$47.40.
Anything above the $47.40 is return on the 2000 shares. If it was at $85.00 in Jan 03 then,
2000 shares
$47.40 cost
$85.00 value in 01/03
$37.60 spread
$14,800.00 invested
$75,200.00 return
508.1% gains
03 Jan 30.00 (OPG AF-E) 11.5
03 Jan 40.00 (VPJ AH-E) 7.4
03 Jan 50.00 (VPJ AJ-E) 4.9
If you bought the shares today at $33.64, then 2000 shares would cost $67280.00.
Once it hit $85 the return would be $170,000.00 a return of 252.7%.
Am I correct in the above understanding?
Thanks in advance.
Stan |
