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Strategies & Market Trends : Waiting for the big Kahuna

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To: Real Man who wrote (87590)	5/28/2009 9:49:24 PM
From: y2kate	Read Replies (4) of 94695

So true. I'm sure you know, best way to avoid time decay is to go out a few months and buy in the money. The Delta is near 1 on deep in the money options, so It acts more like a futures contract. More expensive, though....may as well buy front month, as a hit-and-run approach is working better in these choppy markets. But then you've got to time your entry very well... Worst is to buy front month, out of the money calls. In April I bought Bidu May 240 calls, when the stock was trading at 211. I paid 6.30 per contract. The very next day, Bidu was up to 218, and the calls were going for 6.40 on the bid. So, I made a grand total of .10 for a 7 point movement in the stock-in one day! The Delta on that one must've been about .0000001.... I'd rather catch a long trend and keep adding to a winning position then do the hit-and-run thing, but then, wouldn't we all! <g>

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