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

To: Kayaker who wrote (1680)	7/30/2001 8:40:19 PM
From: alanrs	Respond to of 5205

I would take da money and run. Amen to that. ARS

To: Kayaker who wrote (1680)	7/31/2001 12:05:25 AM
From: BDR	Respond to of 5205

<<Note that the decay of time value is not linear.>> Exactly. Thank you for clarifying that. His options today have $1.69 time premium. There are only 13 trading days left to expiration. At 8 cents a day, everything else remaining equal, only $1.04 of the time premium is accounted for if the decay were to remain constant. Theta (the slope of the time premium decay curve) becomes steeper as expiration approaches. That fact underpins the advice given here before to be a seller of near term OTM options and a buyer (if you must) of longer term ITM options.