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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: BDR who wrote (1185)	6/22/2001 3:29:49 PM
From: Mike Buckley	Respond to of 5205

Most people believe that 90% of options expire worthless. That's because that is the conventional wisdom spread in the press. I used to believe the press until Frank explained to me that it's probably not accurate. --Mike Buckley

To: BDR who wrote (1185)	6/22/2001 4:25:04 PM
From: FaultLine	Read Replies (1) \| Respond to of 5205

Hellooo Dale. Nice to see you back -- we've missed you. --dfl

To: BDR who wrote (1185)	6/23/2001 11:08:54 AM
From: rocklobster	Respond to of 5205

well actually, if you take this information, if 30% expire worthless and 10% are exercised and 60%are closed out prior to expiration, then it would follow that 75% of the options that make it to expiration expire worthless... of the 40% that aren't closed out, 75% expire worthles.. the question for the astute then becomes, of the 60% that were closed out prior to expiration, was the value at closeout less than or more than the value at open. my guess is that in most cases it would be less. I would venture to guess that the vast majority of the time, the time premium being written is profited on. anyway, if simply playing the odds, by these numbers, writing options and holding through to expiration will have an average chance of expiring worthless of 75% rok