Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Strategies & Market Trends : Point and Figure Charting -- Ignore unavailable to you. Want to Upgrade?

To: sherry who wrote (21683)	6/23/1999 11:59:00 AM
From: Dennis J.	Respond to of 34811

Chapter 9 on Options. One of the shortest chapters in the book, yet a favorite of mine.

To: sherry who wrote (21683)	6/23/1999 12:17:00 PM
From: Dennis J.	Respond to of 34811

Diggging a little further into Chapter 9. Tom likes in-the-money (ITM) calls with lots of time. Timing is more important, IMO, than calendar time. If you like a stock, and can time the purchase during a market correction, then only a month or two can be enough time. Buying ITM reduces premium, and benefits from a higher delta (the change in the option price per a $1 change in the stock price). Example: LU July 55 calls were purchased on June 3 for $7, when the stock was in the 59-60 range (just moving up through a short-term moving average). It later sank to about $5, as LU retreated to 58ish, and now trades at 9 3/8 bid with the stock at 64ish. The option could have been sold for over 10 the other day, when LU was about 65 1/2, and there are still about 16-days of trading life remaining for the option.