SI
SI
discoversearch

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 Covered Calls for Dummies Thread
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: JohnM who wrote (3726)5/7/2002 5:15:40 PM
From: Dan Duchardt  Read Replies (1) of 5205
 
John,

Unless you are talking about big numbers of contracts you want to buy or sell all at once, a good indication of the ease of selling back is the bid ask spread. If you believe the stock is going to move more than well enough to cover the bid ask spread, plus the loss of premium due to time passing, then buying the calls makes sense. I took a quick look at the GMST options. The spread seems to be typically .20 near the money. That is not too bad, but it it will be wider if whatever you buy goes well in the money. The strike 5 calls now are around .40 spread for any one exchange. That will get even wider if they get up around $10 ITM. The good news is, GMST options trade on all 5 exchanges, and that competition will help keep the spread from getting too wide. The open interest is substantial, so I expect if the stock does start ot lift the volume will increase as well.

Dan
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News