Boris to answer your question,
the worse thing that can happen by buying
out of the money calls, you loose the premium
you paid, (I like to pay less than $1 per contract)
however in your terms, if you get put the stock
and the price gets much lower, which can happen
and does happena a lot, you get put (worseless)
stock and potentially loose a lot more money.
At the end your broker wins because they charge you
commissions on the both trades, and they keep your
money, and some have as much as 35% in requirement,
that's your money, you don't even get interest on it.
How smart is that???? You are better off just buying
an index mutual fund, because you will sleep better
at night.
The book I recommend is by Lawrence McMillan
Options as strategic investment... Read it and
you will learn something ;-) |
