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To: The Perfect Hedge who wrote (2634)	10/31/1997 2:13:00 PM
From: SJS	Read Replies (1) \| Respond to of 95453

There are some cool tools to do this: First (and most difficult) is to get the implied volatity value for a stock to use in the theoretical option calculation. You can do the math to get this (very long and ardous and you need lots of historical data...) or....you can find a website that has these. If anyone knows of a website that allows you to get the implied volatity when you ask for a stock quote (by symbol), LET ME KNOW! Brokers, etc. have these tools built right into their desktop workstations. I've asked folks like Fidelity, and Schwab to make them available, but they haven't done so yet. I searched a long time (and asked others here on SI) for a place to get this vital value. Not too many knew what it was or where to get it (it seems option modeling is a black art!!), but one guy finally pointed me here (which may have stopped working...but did at one time): webbindustries.com Then, once you know the volatility parameter for the Black-Scholes model, you can go to cboe.com and use their option modeler. There are other option modelers on the web as well, but I like the one at the CBOE. Try this too: webbindustries.com Have fun, and don't lose too much!! Steve

To: The Perfect Hedge who wrote (2634)	10/31/1997 7:43:00 PM
From: Broken_Clock	Respond to of 95453

Glen & Mike...I know one very successful option trader. He is basically a day to severals type trader. He makes decisions often very quickly based on many factors...but one rule I have found more effective than my hit or miss strategy is fairly simple: He won't buy short term options that are more than 50% out of the money. He will buy long term out of money options. He wins about 90% of his trades. Conversely, if I was selling calls I would try to sell short term with less than 50% in the money, etc. Those Feb calls are rich but I wonder if continually selling next month next strike up wouldn't be safer and more profitable. The near term FGII options seem to have a lot of volatility built into the price which I believe really favors the seller. biz.yahoo.com Falcon Drilling News