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.

Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Ira Player who wrote (31534)	7/18/2006 11:42:13 AM
From: Jerome	Respond to of 95598

Hi IRA...your point is well taken.. There are lots of variables in the options calls and puts. But since we can not know all the possible variables and how they play out we have to start with some basic assumptions. When option expiration day comes I would expect the stock price to hang nearest the highest open interest option. The stock could close above or below that strike. (market conditions determining where the stock will finally settle). Hedge funds and complicated strategies and spreads further muddy the waters. As a many year option player I look at these things prior to entering a position. 1) Is the option premium worth the risk? 2) What is the likelihood of the stock price moving up or down two points prior to expiration. What is the likelihood of the stock staying in a well defined range. What and where is the open interest? These are somewhat subjective interpretations. There are no guarantees in any of this stuff, but over a period of years I have had to sell out less than 5% of my positions at a loss because the stock collapsed far below my expectations. By the end of this week we will have a good idea how the market will respond to the major earnings reports, and I will reset my option positions accordingly this Friday or next Monday. Its my opinion that if too many variable are added to the collage then then result is an undecipherable kaleidoscope. JMO...Jerome