Stock Attack -- A Complete Analysis Message Board

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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: sean sanders who wrote (11218)	7/7/1998 10:49:00 AM
From: Electric	Read Replies (2) of 42787

Sean, Personally I like to trade as far in the money options that I can, affordably. I used to buy out of the money calls so I could afford more, looking for the home-run. Doing this, I lost alot of money. When you buy out of the momey calls you are subject to immediate loss of your principle. Example if you bought Dell July 100 calls, they might cost you say 50 bucks for each, and you might think that you can make alot of money. You can, and you can also lose your shirt very fast. buying in the money gives you a cushion in case the stock drops a little, plus the movement of the premium is greater when the stock is over the strike price of the option. The only time I have bought out of the money is when I bought a leap, a long term option. I expected to wait to see the returns on that senario. Did that help?

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