IBM - International Business Machines Corp - Page 2

lets say on Jan 18th it is worth 90 bucks a share, why would anyone buy them from you if the price would have to go up in 2 days for them to make money?

Maybe I should try to find the details.

I thought of this being similar to what VZ did lately with their pension plans. A lot of people very close to the cut off date lost 100,000-300,000 (or maybe more) from their pensions. So after having stuck with VZ for years and building up the pension plan, they found that the pension fund is simply not gonna have as much as they thought. Management's reponse? Tough luck!

All the people that will get out of this with their pensions intact don't care. The ones getting affected will mostly complain about it over a beer to a friend. A few like Ralph M. Casillas who complain and go the press will be labelled as nutjobs and no one will remember in a few years.

On the surface, the way Verizon presented it, it made sense to save money and to phase out the pension while boosting 401k's. But simply put when eligiblility points on the pension side go down and thus give a person less in their pension fund and the 401k matching is "increased", the person will have to work longer to be able to make use of the extra 2-5% increase in 401k matching to be able to makeup for the loss in pensions. For different people this "longer" period may be a little too long. People work hard and some work two jobs simultaneously and they deserve to retire at 65 or whatever they have in mind.

Anyhoo, ....

How do options work? I understand the technicality of the calls and puts. I have a slightly different question related to how to make money on the options.

When you buy options that become valuable, Do you

i) Exercise the options?
ii) Sells the options to someone else who will exercise?

Or do you have the ability of either?

Thanks.

Thanks Agv for your explanation...

MoM I know what Pirateoti means...

Agv said.. if the Apple goes to $85 from his strike price of $80.. the option would be worth of 5*12*100, which is $6000.. but Why would anybody buy that option contracts from you.. if they are not going to make money unless the stock price goes up above that strike price...

if an option is worth nothing after the 3rd friday of every month why would anyone by them from you the day before they were no longer worth anything is basically what Im asking

Ok. THat makes sense.. sorry Pirateoti for stepping over your question

thanks for helping explain it, that is exactly what I was asking

Looks strong MOM, lets see a $90 break.

So my broker, for example, will give me two links in this case that I can click on. One to exercise and one to sell for whatever they're selling for. That would sense, right?

Ouch, IBM got downgraded this morning. Hopefully there is a bounce back but this is going to make a pre earnings run up a little harder. On the other side of this, it might provide a nice entry point into the stock or some calls if you have been on the sideline.

I agree this is way undervalued. That downgrade was really poorly timed because it was going to run through earnings. I don't know how earnings are going to turn out but this stock should be well higher.