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 : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (58494)	7/10/2002 1:32:59 PM
From: Nick Brown	Read Replies (1) \| Respond to of 94695

Hi everyone, With the stock market's bearish movement this year the investment club that I belong to has been looking into the idea of buying call options for companies that we fill will make a strong bounce back up once all the hysteria of possible terrorist attacks, dishonestly among Wall Street and corporate America's accounting issues have faded. We concentrated on the stocks that we know best and those are the ones in our portfolio. OUR BACKGROUND: The investment club has never purchased options before but we have done a lot of reading on the topic and hopefully understand the risks involved, those being that we could lose the entire cost of the contract, but no more, and that there is time frame that is working against you. The stock that we are looking at is THQ Inc. (THQI). This is a stock that we first purchased back in the summer of ‘97 at a split-adjusted price of $2.96. Currently it is trading in the $25-26 range. After several years of owning the stock we have been able to make out a annual pattern of its stock price from July to the first two weeks of December. That is typically when the stock makes it biggest rally. Typically we save a majority of our money throughout the year and invest it in THQ sometime in summer. Then we sell in December when it peaks. By looking at a five-year chart on THQI you will notice the following prices: ........July....Dec(early) ‘97.....$3......$6 ‘98.....$8......$14 ‘99.....$13.....$25 ‘00.....$10.....$14 ‘01.....$30.....$45 ‘02.....$26.....$?? (the above numbers were taken from our price chart in our folder and was rounded to the nearest whole dollar). We are thinking about purchasing several December call contracts. Either the ones with strike prices of $22.50/$25/$30. I have been looking throughout the Internet for a discussion forum on options and came across this one on Silicon Investor. I use to come to Silicon Investor back in ‘97 and ‘98 and mostly read the posts on the THQ thread. A lot of the old-timers have left and it isn't very active anymore. THE QUESTION FOR THE BOARD: In analyzing the different strike prices, how do you determine with one is most likely to the most profitable? Thanks for any info. given. Nick