Call option premiums

spreadem · Jun 6, 2003

Call option premiums must be exploding by now. We've had an incredible rally since the middle of May and the markets are charging forward.

Isn't it time to look at selling some call option premium?

just21 · Jun 6, 2003

take a look at vix.x, almost half the level of march. They're still cheap.

spreadem · Jun 6, 2003

I have been long stock for some time now. I'm looking to lock in some profits.

I'm wondering ... do I buy puts or do I sell calls.

just21 · Jun 6, 2003

Buy puts as volatility is low

Foz · Jun 6, 2003

Quote from spreadem:

I'm wondering ... do I buy puts or do I sell calls.

Of course they have different payoff curves and a positive vs. negative theta, but if you are looking for an edge... With the VIX so low, now might be a good time to buy the puts.

indahook · Jun 6, 2003

Quote from spreadem:

I have been long stock for some time now. I'm looking to lock in some profits.

I'm wondering ... do I buy puts or do I sell calls.

Put your stops in and sell the calls. Think about this for a moment, 90% of all option buyers are wrong. Why is that? Because who is usually on the other side of the trade, THE SPECIALIST. You can bet your bottom dollar he is not putting himself in the position of losing money. Don't ever bet against the house. Buying options is like flushing your money down the toilet.

spreadem · Jun 6, 2003

My objective today (Friday) is to hedge my long position before the weekend.

Either I'll buy some puts or sell some calls ... I'm not sure yet.

I'm handicapped a bit because I don't have option analysis software. I can get option quotes though.

Trajan · Jun 6, 2003

Quote from just21:

Buy puts as volatility is low

Indeed, I bought a 30 IV in csco. Long premium is a better way to hedge at this point. Buy the atm calls and sell stock Chances are there isn't too much time premium because of the low IVs.

spreadem · Jun 6, 2003

I know two weeks to go to cash in on call premium.

Should I go ITM, ATM, or OTM?

Foz · Jun 6, 2003

Quote from indahook:

Put your stops in and sell the calls. Think about this for a moment, 90% of all option buyers are wrong. Why is that? Because who is usually on the other side of the trade, THE SPECIALIST. You can bet your bottom dollar he is not putting himself in the position of losing money. Don't ever bet against the house. Buying options is like flushing your money down the toilet.

The reason most options expire worthless is because most option positions opened are out of the money -- not because buying options is an inherently bad decision.