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To: freeus who wrote (97384)2/11/1999 9:41:00 PM
From: JBird77777  Read Replies (4) | Respond to of 176387
 
Re: How long to hold options

I treat options as a leveraged way to hold the underlying stock. As I earlier indicated, I normally buy options with 6-9 mos. to expiration with a strike price about 25% below the current price of the underlying stock. Normally, the stock appreciates significantly during the 6-9 mos., so that the options become fairly deep in the money. When that occurs, there is no longer any concern that the option will rapidly lose time value as it approaches expiration, so I sometimes hold until expiration day and sell at that time. The only exception is when the appreciation is so rapid that my option is no longer significantly leveraged, in which case I proceed to sell the option well before expiration and repeat the original process.

With regard to placement of one's option positions in the IRA vs. the taxable account, I do agree that one should fill up one's IRA with options before considering buying any options in the taxable account.

JB