Chris; RE:" XLK -vs- NDX "
Thanks so much for the thoughtful reply, Chris - it was very, very useful indeed! You have more experience with this new XLK vehicle and its options than the rest of us in the sandbox. I believe that XLK will rapidly become as popular as SPY for the AMEX/NASDAQ exchange.
From your observations so far, it looks like the near-the-money XLK options you are using are about 3:1 leverage of the XLK underlying; ie., 10% gain in XLK = ~30% gain on your contracts.
Your analysis of the underlying components for XLK and NDX was especially useful to me, and I'm sure all of us, Chris.
>I really like the power of a LEAP on an index in motion...
...don't we all, dude !
I've been using this site...
webbindustries.com
...to monitor the XLK greeks; click on "options" after you enter the site and enter, say 'XLK' at price of '33', for example. It is very nice to be able to buy XLK as stock and write covered CALLs on it, too, imho.
I agree with you that it is nice to have XLK LEAPS to work with; no, I do not know of any such equivalent NDX.X or MSH.X derivatives, either.
One other thing about XLK is that it is more-or-less like a closed-end fund, responding quickly to raw changes in its components - whereas SPY acts more like the S&P-500 Futures rather than the SPX.X index, and is a bit more difficult to trade as a result.
Thanks again great info and continued good luck to you (^_^)
-Steve |
