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To: BGR who wrote (97141)2/11/1999 1:02:00 AM
From: JBird77777  Respond to of 176387
 
BGR,

RE: Option Deltas

Thank you again for your comments. No apology is necessary!

JB



To: BGR who wrote (97141)2/11/1999 10:01:00 PM
From: JBird77777  Read Replies (1) | Respond to of 176387
 
RE: Option Deltas

I have taken a further look at option price movement. It was simplified by the significant price increases of various tech stocks today.

I ADMIT THAT I WAS COMPLETELY WRONG!

I totally agree with you and Bob Craig and am adjusting my strategy and portfolio accordingly.

I withdraw my incorrect comment that buying leaps does not give significant leverage. It does. Because of the significant leverage and avoidance of the possibility of a margin call, leaps and other options may indeed make sense in a taxable account. The immediately apparent disadvantage of options vs. buying stock through margin in a taxable account is that, generally, the holder will not have sufficient funds to exercise the call at maturity, so will sell the call and have a taxable event. This disadvantage should be compared with the aforesaid leverage and lack of margin call possibility.

Bob Craig provided the following site for checking the delta for various options. It is very helpful.

fast.quote.com

My thanks to you and Bob for straightening me out, and I hope that I did not lead others astray.

JB