BEFRIEND THE TREND Short-term Options Trading Thread Message Board

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Strategies & Market Trends : BEFRIEND THE TREND Short-term Options Trading Thread

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Jan 16 4:00 PM EST

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To: sean sanders who wrote (958)	2/18/2002 2:28:24 PM
From: Scott Bergquist	Read Replies (1) of 4058

I have found that deeper ITM options, with nearest month expiration, can often contain little time decay potential. This is especially true of OEX options. For the next 7 trading days, with Feb expiring, March upon us, you'll find options 10-20 points deep reflect 50% of the market move for profit, and 70-90% of the "loss" (e.g. the OEX goes down 5 points, the put option increases 2.50, the call will decrease about 4). Percentagewise, you won't make much, but if you are looking to make $500-$800 in a trade, it is quite possible. The only caveat is, you must be quick to cut losses (though comebacks are often 100%, it is not adviseable to hold). News can strike unexpectantly on index options. An OEX spike up two weeks ago was due to Honeywell intraday news, yet I looked and looked and couldn't connect to the news/reason for 20 minutes (which is a LONG time for delicate position).

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