Doctor Jack's Stock Medicine

[DSteckler]

I love it when "professionals" quarrel.... Hey Dave! stop being so darned mean today! First Peanuts, now Dr Jack!.... Can't you see he's sleepy already? SsSsSsSsssss.

Now, now, Lye, let the men talk among themselves. Go on back to your room and play with your toys.

[lemonjello]

What say you?

Dr. Jack,

Does IMCL look like it might be up to bat? I'm thinking something could be up.

[Jack Haddad]

Imcl

Dr. Jack,

Does IMCL look like it might be up to bat? I'm thinking something could be up.

IMCL is more liklely to explode to the upside than implode... Once again, I didn't the plunge from 35 was warranted as a result of IMCL losing a buyer. The stock will bounce back.

[Jack Haddad]

But that isn't what you wrote. You specifically said:

<< If INTC is below $20 when jan options expire, you only lose the commission, but if it goes to $22.50, you'd make lots of money. >>

You were referrng to expiration day in January. In fact, if INTC closed at 22.50 on expiration, your 22.50 calls would expire worthless and your 20 calls would cost you an additional $2.50, for a total loss of $2.70/contract.

Why would you let them expire worthless? If you had bought them at .40 cents/contract when I initially recommended them, they would be far more than that when INTC is 22.50. Use the formula to calculate the intrinsic and decay value for each call. Bare in mind, for every short call, youre buying three... and bare in mind that your short call at strike 20 decays faster (27% more) than call 22.50.

[DSteckler]

Why would you let them expire worthless? If you had bought them at .40 cents/contract when I initially recommended them, they would be far more than that when INTC is 22.50. Use the formula to calculate the intrinsic and decay value for each call. Bare in mind, for every short call, youre buying three... and bare in mind that your short call at strike 20 decays faster (27% more) than call 22.50.

Jack, if INTC is at 22.50 on expiration day, the 22.50 calls will be worthless. On that day it's all intrinsic value and no time value. You didn't say, "prior to expiration day," you said "on expiration day." I agree that if INTC makes a run up to 22.50 prior to December expiration, the 22.50 calls will gain value.

BTW, you were talking about naked (bare) Jan. 20's, not naked (bare) minds. <g> I think you meant to spell the word "bear."

[lemonjello]

At this point I'm thinking both of you should stay out of the option business.

Doc,

Where did you get the 27% figure?

Further checking the numbers, if the stock price doesn't start moving up (assuming other conditions constant) the position never improves. In fact, if INTC stays at the current price, around the middle of Dec you would actually have lost about $400 assuming the position in my example above, the position then gradually improves into expiration where you get the results in my previous example at expiration.

Why would you let them expire worthless? If you had bought them at .40 cents/contract when I initially recommended them, they would be far more than that when INTC is 22.50. Use the formula to calculate the intrinsic and decay value for each call. Bare in mind, for every short call, youre buying three... and bare in mind that your short call at strike 20 decays faster (27% more) than call 22.50.

[spikefader]

Dr. Jack,
Does IMCL look like it might be up to bat? I'm thinking something could be up.

IMCL is more liklely to explode to the upside than implode... The stock will bounce back.

Long is wrong imho.

[Jack Haddad]

Tso

Bought 1 block at 58.31

[Jack Haddad]

Tso

Bought 1 block at 58.31

Sold at 50.89

[jiesen]

Sold at 50.89

you mean 58.89?

[Jack Haddad]

Nem

Added 2 block at 47.50 to 47.56

[IIC]

you mean 58.89?

I think it was 57.89

[IIC]

I think it was 57.89

Maybe not...the low was 57.90 since the post from what I see

[Jack Haddad]

you mean 58.89?

Youre correct.

[Jack Haddad]

Nem

Bought 1 1/2 blocks of NEM at 46.13 to 46.15