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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: JBird77777 who wrote (97013)	2/10/1999 5:52:00 PM
From: freeus	Read Replies (3) \| Respond to of 176387

I didnt realize this. So you are saying, dollar for dollar, if one is buying LEAPS the upward movement of the stock itself is better? Would this be true for close in calls too? Freeus

To: JBird77777 who wrote (97013)	2/10/1999 6:12:00 PM
From: Voltaire	Respond to of 176387

JBird77777, Correct. Very useful post. Voltaire

To: JBird77777 who wrote (97013)	2/10/1999 7:23:00 PM
From: Kayaker	Read Replies (2) \| Respond to of 176387

If Dell were to appreciate $10, then ZDEAD will appreciate approximately 35.25 - 32.5 = 2.75, which is only about 8.5% of 32.5. I realize that this math is different from the math using the "delta" of the option, but in my experience it is more accurate. JBird, I can't say as I agree with you on this. IMHO, you are greatly underestimating the rise in the Jan 2001 120s. The delta is currently .62 and as you rise through the $10 it will increase, so you would get something close to 6.50 for a $10 rise in the stock. In my experience the deltas are pretty accurate.

To: JBird77777 who wrote (97013)	2/11/1999 12:23:00 AM
From: BGR	Read Replies (2) \| Respond to of 176387

JB, With all due respect, I strongly recommend that you use the deltas. They are there for a purpose; the arbitrage and risk management arms of every single brokerage house uses those to hedge their portfolios. For the 120 '01 calls, the delta is about 0.639 (as given by the CBOE options calculator), thus the percentage increase for a 10% move in equity (100-110) would be about 20% (32-38). A cardinal rule in option trading is that if you trade options you have to understand and use the (so-called) greeks; trying to approximate the greeks is dangerous for the trader's financial health. Besides it is mathematically provable that the percentage movement in any option is going to be more than that of the underlying equity. Options are always leveraged. You may want to try Options, Futures and Other Derivatives by John Hull for further details. Best! -BGR.