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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: Madpinto who wrote (1639)	9/17/1999 8:13:00 PM
From: satish kamat	Respond to of 2241

<<It won't do you any good to compare a strategy requiring $100 with one that needs $1000. >> good point. <<However, with OTM calls, the stock needs to go up more to break even.>> don't take me wrong. i was baffled with the same problem: how to calculate the probability of success (for the risk-to-reward) with increasing delta of OTM. I am planning to run some random simulations using the actual data. thanks for the suggestions.

To: Madpinto who wrote (1639)	9/18/1999 7:25:00 PM
From: browser	Read Replies (1) \| Respond to of 2241

ok! i tried it since i have trouble deciding which month to buy! was interested in CPU=$7.12 CPUKU=0.688 10 CALLS=688 breakeven=8.188 (nov) CPUAU=1.25 5 CALLS=625 =8.75 (feb) CPUBU=1.50 4 CALLS=600 =9.00 (march) stock goes up $1.50 to $9 each pt=.50 so presume 0.75 to each option except cpuku which is a 100% profit cpuku=(0.688+0.75=1.438) 10 calls=1438 a double??? cpuau=(1.25+0.75=2.00) 5 calls=1000 cpubu=(1.50+0.75=2.25) 4 calls= 900 is this what u mean one should do?? before buying an option??? TIA