Options 201: Beyond Obi-Wan-Kenobe Message Board

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Strategies & Market Trends : Options 201: Beyond Obi-Wan-Kenobe

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To: Dominick who wrote (383)	2/12/2002 7:56:25 AM
From: jt101	Read Replies (4) of 1064

<<MIR is in a steady downtrend. TXN is up in a resistance area but at least it's in an uptrend>> Dominick, I agree. I am looking at MIR as a bottom fishing case, (I know I have burnt my fingers thinking like this before, but you know old habits die hard). Based on my experience with the TYC bull spread I can say - With just one month time horizon, with 4 trades (in my case) and coming out with a decent profit is not easy. On a realistic basis, I lose 4 spreads and 4 commissions, which can be a lot. Even if I increase the number of contracts, it won't reduce the spread. May be TYC was a wrong stock for this scenario, I really don't know. The next time, I will try buying a long call (6 months or above) and writing a near term call. I am thinking if the short call should be a higher strike price, compared to my long call. Should delta be a very important criteria while deciding the month and strike for a diagonal spread? I still don't know what is IV? Thanks everyone, jt

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