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Strategies & Market Trends : Waiting for the big Kahuna
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To: Paul Kern who wrote (89952)8/27/2009 12:04:29 PM
From: Real Man1 Recommendation  Read Replies (1) of 94695
 
They are not supposed to have much premium. Put/call parity
requires premium to be the same as for puts, which are trading
at 0.01 bid/0.02 ask. You are bearing the risk of decline,
on leverage, like with the futures. September C 4 calls don't
have much time premium either, only 5c, so you capture 600%
of the move higher if it moves up fast. Of course, in case
it moves down, 600% will be in the other direction, as I
just found out, cause I'm long those. I do it to reduce
risk, actually, since the strike acts as an automatic stop
if you hold the rest in cash.

C is indeed on da move today. I think it's undervalued too,
and so is whole XLF.

P.S. They've been hiring some people lately.
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