Option Plays - Page 2

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.

Also:
http://kevinsmarketblog.blogspot.com...up-to-buy.html

[QUOTE=cuencap]AAPL January '07 $95 calls.

I find the premium on AAPL options to rich for my blood.

Here are some calculators for options and warrants. If you are playing all the time Hoadleys is worth the money.

http://www.hoadley.net/options/options.htm

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.

http://www.888optionsnet.com/calcula...calculator.asp

www.ivolatility.com also has many scanning tools.

BIDU January 120 puts

Please elaborate Leebert

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?

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?

THIS IS WHY YOU DON'T PLAY EARNINGS.

Sorry you learned the hard way Big Bull!

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



















J/K Options = Wild!

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.

www.etfcoveredcalls.com

Read up!


they absolutely are. and the only way to make them more wild is to try to pin down earnings plays. Don't do it!