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Strategies & Market Trends : Option Trades -- Ignore unavailable to you. Want to Upgrade?

To: the options strategist who wrote (901)	3/19/1998 4:50:00 PM
From: zx	Read Replies (2) \| Respond to of 2341

hi Jen, trading close to expiration. if you buy out of the money long options the chance of them expiring worthless is great. if you buy in the money options, your chance of making money is much better. if you buy deep in the money options that track the stock price, your chance is even better of making money. the downside of deep in the money options is that you can lose more money if the stock moves the wrong way. i trade in the expiry month. but most of my options are further out. i like to trade just before expiration. the number of trades just depends. the chance to lose is greater but there is little time value added to the option. the trade i made on SFAM is a good example of trading the last few days before expiration. march 22.5 puts were at ~.5 the 25 were ~2. if the stock moves alot the out of the money options are the best value. the 25's followed the stocks value. i chose the 25's. felt the risks were okay. they were doing well intially. up 13/16. but SFAM rebounded and they are in trouble. i went with the better chance to make some money and will lose more money. good luck, ag