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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: S. maltophilia who wrote (82118)	7/3/2000 10:43:52 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Khalil, My reasoning is simple, if not simple-minded <g>: 1. It is 2 1/2 years, not 3 1/2. That makes a big difference in the math. 2. The first rule of making money is not to lose money, and you are less likely to lose money when the option premium is greater than the remainder of the money you have to put up to hold the position. 3. If the stock runs to $100, your option and my option will both lose huge amounts of pure premium, but I will pocket much more cash. 4. You have to turn your trick twice to catch up, and the premiums may not be so juicy in six months and the stock price may be lower. 5. In a takeover, I will be more golden than you. But the big reason is number two. I am taking a huge chunk of risk off the table and you are leaving it on the table for potentially higher total returns. I will always opt for the lower risk trade in a limited return position.