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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: Uncle Frank who wrote (4678)12/21/2006 3:40:16 PM
From: TimF  Read Replies (2) of 5205
 
Picking the right number on a roulette table pays 35:1, but the gambling houses build huge casinos from their profits, and the patsies go home broke.

That's true but its not very relevant to options purchases, at least not in some overall or universal sense.

Buying naked calls is very bullish, and buying naked puts is very bearish.

Buying $1000 worth of calls is a lot more bullish than buying $1000 worth of stock. But buying calls representing 1000 shares of stock is in many ways less bullish/risky than buying 1000 shares.

Not that I plan to buy any calls or puts right now. But if option prices decline even further it would seem sensible to do so, it wouldn't be very similar to playing roulette.
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