This is to the people who follow options closely, which I do not:
How are the option premiums and striking prices holding up ? Are they reflecting the same level of decline that we are seeing in the stock, or is the premium for at-the-money calls increasing ?
For those of you who are less sophisticated, the answer to this question will tell us a lot about how the relatively more experienced people who write most of the options feel about the future. If they think the trend is down, or even steady, they will not hesitate to sell at-the-money calls for an unchanged, or even lower, premium. If they expect the stock to recover, since calls are good "into the future", they will not lower the option striking price as much as the stock is going down, for a given premium, or they will charge a larger premium for at-the-money calls, as the stock goes down (but only temporarily, in their view).
What I don't have is an visibility as to how striking prices and option premiums have tracked the decline in the stock's price. I know some of you follow this closely, could you post what is happening, in general ?
Thanks,
Barry Watzman |
