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To: Henry J Costanzo who wrote (134452)	7/16/2006 10:47:11 AM
From: venividivici	Read Replies (3) \| Respond to of 209892

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.... This is true, but why not just buy front-month options and stop out of the position and re-establish after further analysis gives you a new entry point? That way your e-wave or other analysis becomes your 'insurance' and probably costs even less than the time premium. There's definitely more than one way to be successful in trading, but I would think that the opportunity cost of holding a six-month out option would be higher than just allowing yourself to get stopped out of a front-month option.

To: Henry J Costanzo who wrote (134452)	7/16/2006 12:51:19 PM
From: Moominoid	Respond to of 209892

I use options primarily in an IRA instead of shorting and then use to go long too as there isn't much money in there. Also in Australia I used options for trading because I couldn't short (one can now with my broker but it is complicated) and because as brokerage was a proportional fee it was cheaper to buy a warrant (investment bank issued option) rather than the stock. In all these cases I am not really interested in the option property of the option and so try to avoid paying much or any time premium. In the past I also sold options but decided it was too much hassle for my personality type :)