SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : PairGain Technologies
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Rainmaker who wrote (25301)8/3/1998 3:42:00 AM
From: Spaw  Read Replies (2) of 36349
 
Rain,
Stock closed Fri. @ 13 1/2.
Strike price is 12 1/2. You are paying 2 and change for 6 months of upside potential already in the money. All upside in the stock goes into your option position. Those Oct. 20's are so far out of the money you are paying 100 % time. Look at the potential for making money here. I'm essentially paying for 5000 shares of stock for the price of 1150 shares long. If PAIR goes to 15 in the next month or so, I get a buck and a half on close to 5000 shares. Deep in time and in the money gives me a lot more delta than that 'cheap' out of the money contract. High delta = high return. Downside is there as well, but I have a better chance of making money with the January 12.50s.
Academic, but good food for thought. My thinking centers on the
best chance at a good return.

--spaw--
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News