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.

Non-Tech : Invest / LTD -- Ignore unavailable to you. Want to Upgrade?

To: waverider who wrote (1940)	8/19/1998 5:17:00 PM
From: Lucretius	Read Replies (2) \| Respond to of 14427

we are fast approaching Aug expiration, all options will lose a chunk of time value on between now and Mon.

To: waverider who wrote (1940)	8/19/1998 6:53:00 PM
From: SJS	Read Replies (1) \| Respond to of 14427

Rick, As you approach expiration, the value of the option rapidly decays if there is no chance it will be in the money, or even near the money. Lots of people buy very cheap options with "throw away money" hoping for that chance to buy them at 1/8s or 1/4s and do a triple or even better. It's a famous game that usually doesn't work out. Two things keep an option pumped up: 1) Time until it expires, the longer until it expires the more premium is in it. 2) Proximity to it's strike price, the closer it is, the more it's worth. As a matter of fact, I try to sell calls on Friday because I get 2 "free" days of decay. Decay means money in my pocket.