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Option Plays - Page 2

post #21 of 13646
Thread Starter 

CHTR looks attractive.

The stock has had a nice run up.

The Jan 2007 calls look good.

Strike- 2.50
Bid- Ask- .70-.85
Premuim0 $.08

I like the company but I would be careful due to its recent run up. The stock may very well continue its run up but it might dip a bit before movin any higher.

If it continues to show strength i will surely add some.

TA concerns me a bit since it is singaling an overextended stock however I have seen many stocks that continue it strong uptrened for a while before dipping.

post #22 of 13646
AAPL January '07 $95 calls.

The stock recently hit its 20 day moving average - and its explained in other AAPL posts how the stock has been climbing and bouncing off the 20 day MA.

post #23 of 13646
[QUOTE=cuencap]AAPL January '07 $95 calls.

I find the premium on AAPL options to rich for my blood.
post #24 of 13646
Here are some calculators for options and warrants. If you are playing all the time Hoadleys is worth the money.


Hoadley has an Excel add-on which allows you to do everything from put together combos to doing GARCH volatility estimates. It does require some excel knowledge though. It does calculate the historical volatility from just plugging in the stock symbol

888Options has a position simulator that I've tried, and its free although you need to find or just estimate the historical volatility.


www.ivolatility.com also has many scanning tools.
post #25 of 13646
Thread Starter 
Looks good Calgary Lady.


post #26 of 13646
Thread Starter 
I am lookin gat the Mittal Steel March '07 calls

The metal sector is still hot despite some fears of it slowing down. The metal stocks should continue to do well through the beggining part of '07.

Mittal Steel March calls
Strike- 25
Bid Ask- 17.50-18.00
Premuim- $.55

Pretty chreap options for such a high level growth company.

PE ratio of 8.

Growrth rate of 10%

Fundmamentals looks solid.

TA looks OK.

post #27 of 13646
Thread Starter 
I will post more option plays later on this week.

post #28 of 13646
BIDU January 120 puts
post #29 of 13646
Please elaborate Leebert
post #30 of 13646
Since no one is answering my question in stock market university, here it goes:

Why are the bid/ask prices on an option table important? I thought once you buy the option, if your strike price is $15 and the stock is at $20...you can sell your option to make $5x100shares in one contract=$500

I'm not really understanding the bid/ask part of it and also where to find the premium price. Is the premium price the amount you pay for the 1 contract?
post #31 of 13646
The difference from $15 to $20 is $5. So if it was the day of expiration the option would be worth that intrinsic value of $5.

However, prior to expiration there is other value in the option, which includes a lot of things like time and volatility. So, if you are say 3 months out from expiration, a $20 stock with a $15 strike price might be worth $6.50. So someone will bid $6.30 and someone else will ask $6.60.

Get it?
post #32 of 13646
Thread Starter 
Also the premuim is the price paid for every contract that you own.

The way you get the premuim of a contract is by taking the strike price and adding it to the ask(you really average the ask and bid and the add it to the strike but I like to add the ask since it is more conservative). You then subtract the stocks last trading price from this number that you added it up and that is your premuim.

Sorry for not explaining this ealier. Baggi explained the first part.

post #33 of 13646
Originally Posted by bigbull
I am looking at the BBY January '07 calls (OOA.AJ).

The strike price is 50. Thr premuim is 1.40. In my view these optione are relatively cheap due to the fact that earnings are going to be released on the 12th.

I am expecting a nice boost in the stock price and as a result we should get a nice boost in the '07 calls.

BBY is growing at a consistent pace with solid revenues and sales year over year.

They have a good manegement team.

ROE and ROA have increased consistetlny quarter over quarter.

They have a steady surplus of money
(cash flow). They keep adding to their cash flow.

Nice retun from assets.

TA is also good.

Slow STO is bottoming.

MACD are convergin bullish.

RSI, MOMO, Volume accumulation and DMI have all gained strength.


Sorry you learned the hard way Big Bull!

post #34 of 13646
Thread Starter 
Yeah, its true but I bought some protective puts to cut my losses.

post #35 of 13646

Sean, what are you doing bringing those low float penny stocks in here!

J/K Options = Wild!
post #36 of 13646
Originally Posted by bigbull
Yeah, its true but I bought some protective puts to cut my losses.

You are not supposed to buy protective puts for a long call position. You are then double long volatility. Protective puts are reccommended for holders of major positions of common stock. Even then, they are, in my mind, second to covered calls. For, with covered calls, time is on your side. With protective puts, it's a race against the clock.

I'm glad you had some kind of hedge, but, the "booyah" is uncalled for. I hope readers will understand that Big Bull, via this strategy, lost money. Because (no offense BB) it is a losing strategy. Playing earnings that is.

Now, next time you want to hedge your bet, look at doing a buy write. E.G., buy April ITM or ATM calls and sell January OTM calls. You will then at least get a discount, & you will be hedging against theta (time value decay), which you were effectively doubling down on in your protective put & long call position.

Next time tho, just stay away from the earnings! Money doesn't have to be made overnight. And, I tell you now, my best money has been made w. a grind.


Read up!

Originally Posted by amohedas

Sean, what are you doing bringing those low float penny stocks in here!

J/K Options = Wild!

they absolutely are. and the only way to make them more wild is to try to pin down earnings plays. Don't do it!
post #37 of 13646
Thread Starter 
Its true. I lost money just like any other guy who bought stock or calls on this baby.

Some trades/investments are profitable and some are not. In this case I made a bad one and I recognize it. I sold my calls today and puts and I no longer own BBY.

Also, the Booyah I post it in any every single thread that I post. Its not insinuating anything.

Looking for some more good trades/investments.

post #38 of 13646
Thread Starter 
Dr Sean.

Thanks for the link.

Its true earnings are very risky. I do not play earnings oftenly. In fact I just play once or twice a year and that is it.

post #39 of 13646
Thread Starter 
Dr Sean.

Thanks for the link.

Its true earnings are very risky. I do not play earnings oftenly. In fact I just play once or twice a yeard and that is it.Also it was kind of stupid in my part by not giving myself a bigger time frame for my calls.

post #40 of 13646
Thread Starter 
Also, options are meant for the long term. I have know learned this from this experience.

If one wants to flip a stock then one would just buy some common stock.

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