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To: Moominoid who wrote (134450)7/16/2006 9:07:33 AM
From: skinowski  Respond to of 209892
 
Sounds like you are ready to go to futures. I think of doing it myself too. The degree of leverage is - for practical purposes - similar to that of options, and there is no time value deterioration. The spreads are tiny - while with options, several percentage points are the norm.



To: Moominoid who wrote (134450)7/16/2006 10:06:27 AM
From: Henry J Costanzo  Read Replies (2) | Respond to of 209892
 
Good morning, David......beautiful weather in our parts this weekend....enjoy..

I think Cisco makes a good point about the insurance aspects of far-out options. I have often bought long options.....say 6 months out.....while looking/hoping for a profitable close in a month or two. Requires paying a time premium which may sometimes look pretty steep. OTOH that premium typically decays only modestly in the first month or two. That decay is the real cost of the "insurance"...and it can turn out to be very little....