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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: jficquette who wrote (2216)	7/18/2004 1:49:39 PM
From: jjs_ynot	Read Replies (1) \| Respond to of 2241

That statistic is probably not correct. It is often quoted but not verified. Also, it has to do with options at expiration. Many OTM options at expiration have already been rolled or closed from the initial by/sell price.

To: jficquette who wrote (2216)	7/18/2004 2:42:38 PM
From: jt101	Read Replies (1) \| Respond to of 2241

In addition to what Dave has rightly said, I think in options, for the sake of easy analysis, assume 50% of the contracts are calls and 50% of the contracts are puts. So at expiry, at least 50% bound to expire worthless. In addition, in options, not only the stock should move in your direction, but it should also move in your direction within the given time period. This might make another 20-30% of the contracts expire worthless. In total this comes to about 70-80%?? These contracts may be part of some hedging strategy and it is difficult to ascertain the correct scenario because of this. These are just broad ideas, I am also not too sure about the 80% statistics you are referring to. I hope this helps. just my 2 cents...

To: jficquette who wrote (2216)	7/19/2004 5:40:48 PM
From: TimF	Respond to of 2241

I've never seen hard data behind the claim but its not so unlikely. If you buy options and hold to expiration you are more likely to lose money then gain money. But you loses are limited and your gains can be large. Tim