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Technology Stocks : Full Disclosure Trading
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To: BWAC who wrote (8896)4/28/2004 1:53:51 PM
From: Sam Citron  Read Replies (1) of 13403
 
OT BWAC Further it gets away from the strike price, the less people are willing to pay for time value.

Seems you are right. Right now there is $6.10 in intrinsic value in those 2 month deep in the money puts, so the time value is only about $0.55. So if puts don't provide much protection from a substantial price decline, how are you supposed to make money on them, and how did your 2k paper profit on a closely watched ST position get away from you?

I have never bought puts, so I am just trying to get a better understanding of the potential and the pitfalls. Sorry it cost you.

Sam
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