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Strategies & Market Trends : Tech Stock Options
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To: Tom Trader who wrote (29429)11/24/1997 7:35:00 PM
From: Tom Trader  Read Replies (2) of 58727
 
AK (Andrej?)--I can't find your post re premium decay

Like I said before, I really have no idea whether someone who traded the OEX options would make money based on the signals that my system generates. The premium decay is a factor but on the other hand since my average trade lasts for a week, the amount of decay would not be significant especially if one went out an extra month.

I once posted that selling OEX puts on a buy signal and selling OEX calls on a sell signal would have the advantage of both the benefit of the trade possibly going the right direction as well as the benefit of premium decay -- but the margin requirement would be huge, the risks would be greater and one would have to be even more disciplined as a trader.

I know that a couple of people are paper-trading my system based on using the OEX options to see how well it would work and also what the optimal strike price would be when one takes a position.

Good trading
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