Dave, re:AMZN
If a person is a medium term (couple months) trader, why buy long stock here? When a stock moves as far and as fast as AMZN, Deep, Deep In the money calls trade barely above intrinsic value. This provides a unique situation because of the magnitude of the move. Jan 75 calls can be had for a fraction of a point above intrinsic value.You can essentially have 2:1 leverage (compared to long stock)for about a point.
Interesting perspective. On the plus side, if the stock were to significantly deteriorate, options premium would reappear; that is, option holders would have an advantage over stock holders -- assuming Theta is intact, which is implied by your time horizon. On the negative side, AMZN is highly manipulated to the benefit of option writers (as exhibited by the so called "short run" this week.) So, the options player needs a fancy game plan and reasonable stops.
JMO, BWDIK, LMNOP, M-O-U-S-E
ALan |
