Recent content by contango2

I may be wrong but I'm not sure that a 5 ES point move in either direction is going to move any index option by an appreciable amount especially with the trading ranges we are seeing these days.

DITM options although they may have a delta close to 1 still involve leverage....just look at the cost of any DITM option and then look at the cost of buying 100 shares of the underlying you can easily see the leverage involved. So they should be used wisely with regard to leverage. On the...

"If the underlying drops, you will lose the time premium that you paid (the extrinsic) plus the amount that the stock drops drops (intrinsic)." ....wrong ...Deep in the money options have very little or even no time value. ATM options have much more time value to risk losing. "Your...

I think you have missed the point... What is being discussed here is the use of DITM options as a PROXY for outright buying of stock. Let's say I wish to buy 100 shares of Microsoft. At $ 28.96 per share that costs $ 2896. Instead I can buy an April 15 Call for $1395 that has a current...

Each deep in the money options contract (delta close to 1)behaves similarly to owning (or shorting) 100 shares of the underlying. Time value is not much of a factor if you are DEEP in the money. So in your example the extra 1.50 in time value you say you are paying is more likely to be next...

I agree with Freehouse. I believe you treat them as separate transactions for tax purposes.

Anything for ratings. Could you imagine if Cramer were chairman of the Fed.....what a nightmare.

Bernake and the Fed are playing it as best they can. Way too much emphasis is put on this man and his ability to control the US (and the world's) economic destiny.