Options: Low Cost Investing

[New-born baby]

Keep the change

Thanks NB
If I sell the Jan 15 calls and the stock pulls back to say $10.50 in the next week, what do you estimate I could buy them back for?

My question for you is: why would you want to buy them back? They are giving you $220 per hundred. If the stock pulls back, just keep the change

Delta: the amount of change in price in the option when the stock price changes. Example: HOM's $15 call for JAN 07 has a delta of .489. Therefore, if HOM moves $1, the option prices moves in the same direction $.49. Your question: HOM moves from $11.65 to $10.50, the option price moves from $2.20 down to $1.65.

[grebnet]

HOM option saga

My question for you is: why would you want to buy them back? They are giving you $220 per hundred. If the stock pulls back, just keep the change .

I think that HOM is in a trading range for a while( so why dont I just trade it,right?) If I sold calls and later felt it was gonna turn up from ie $10 ,I could buy back calls and maybe repeat the process ., or just keep the $0.65 profit.

Of course since we started this conversation HOM has pulled back ..oh well

[TFred]

Greetings NB,

Any thoughts on doing some uncovered calls in a market like this ?I really dont want to be long anything right now.

cordially Tom

[New-born baby]

Anything bearish

Greetings NB,

Any thoughts on doing some uncovered calls in a market like this ?I really dont want to be long anything right now.

cordially Tom

Tom,
Anything with a bearish chart and a close spread is a good candidate. Usually something with a high volatility will still offer a good amount of cash. I really think something negatively affected by interest rates is best. How about home builders or auto manufacturers? Short Ford. AFA is boycotting the homosexual supporting companies like F, so that's an added issue to depress the stock.

[TFred]

Tom,
Anything with a bearish chart and a close spread is a good candidate. Usually something with a high volatility will still offer a good amount of cash. I really think something negatively affected by interest rates is best. How about home builders or auto manufacturers? Short Ford. AFA is boycotting the homosexual supporting companies like F, so that's an added issue to depress the stock.

Greetings,

Thanks for your reply NB,it was mentioned to me that the last week before expiry is a good time to sell some way out calls with poor odds of being exersized.They compared them to sucker bets on a craps table,with the advantage being on the ''house''.

Was curious if youv'e ever sold the ''gamblers'' some calls?

cordially Tom

[New-born baby]

Greetings,

Thanks for your reply NB,it was mentioned to me that the last week before expiry is a good time to sell some way out calls with poor odds of being exersized.They compared them to sucker bets on a craps table,with the advantage being on the ''house''.

Was curious if youv'e ever sold the ''gamblers'' some calls?

cordially Tom

Naked calls are risky, even way out of the money. Yes, I have done it, and I also sit right next to the computer and watch them every moment. I sometimes do it on the very day of expiry with a stock I like. For example, let's take PBR. The day of expiry the $90 calls were selling for $50 per contract. The stock was $88. I sold five of them without buying the stock and watched the screen the last three hours and collected the premiums. If necessary I would have purchased the stock.

If you can't watch the screen, don't do it. And have a plan in place if the stock runs up.

[spikefader]

Predictive VIX call nails it!

.......having studied the long-term VIX chart in depth tonight, I make this bold prediction:

If VIX makes a weekly close over 18.00 the market will find a significant low within 10 trading days and rally extremely bullishly from that point in time.....this is healthy correction that sets up for a wonderful buying opportunity.

The bounce came after 4 days of VIX closing weeklly over 18.00.
Comments welcomed.

[New-born baby]

His dust is gold

The bounce came after 4 days of VIX closing weeklly over 18.00.
Comments welcomed.

Spike
These two posts of yours are worth your weight in gold. Beats all the FA on the market.

Readers: read Spike's posts and understand something that will help you the rest of your life! When it comes to Spike, "his dust is gold." As always, thanks, Spike!

[tagthatstock]

question

i dont want to 'consume or overtake' your forum,, is it ok with you for me to post option plays here?