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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (20981)	12/20/2002 1:42:47 PM
From: Jeffrey S. Lillie	Read Replies (2) \| Respond to of 30712

I only play ITM options. the other day we were around 900 spx so i wanted to select a call and put that should contain most rise or fall. i put those on my streaming quote page. i selected jan 925 puts and jan 875 calls. that is what i will trade until we move out of that range. i get very familiar with them that way. if i get a great entry (yesterdays calls may turn out to be one) i hold those and buy puts as a hedge when we get overbought. puts are sold on the dip and then im long again. if we continue to trend up like i think we will for a week or so, then i will make out big on the calls and make good chunk trading the puts on the way. i prefer options in the $20-40 range. just my preference. i dont dick around with OTM options. surest way to lose money unless you are really right. as for gains, i like to get between 15-30% early in the month and 30-50% in last week before expy. i did a little research into spx options last weekend that compared the premium of the puts and calls for spx for dec02,jan,feb, mar,jun,sept and dec 03. The percentage of the options price dedicated to premium rose significantly the farther out you went. i felt this increase took away any justification i could think of to go out more than 3 months. in my example, the % preminm went like this jan 27%, mar 46%, sep 61%, dec 66%. i would like your perspective on why you use leaps over a 3 or 6 month option. j