|
PureBytes Links
Trading Reference Links
|
Jack,
I keep about 20% of my portfolio in LEAP options. The reason is that
gives me additional leverage without having to take margin risks and pay
margin interest. I use LEAPS because option value is a combination of time
premium plus intrinsic value. Since options are wasting assets time premium
decays with the passage of time. That decay accelerates during the last few
months to expiration. I want to minimize the time decay so I use LEAPS with
over a year to expiration. If I only hold it for a few months and the stock
price doesn't move, I minimize my time decay loss that way. Also, it just
gives me a much longer time in which to be right. If I used near term
options, I'd have to be right immediately <G>. There are only a selected
number of stocks (about 100 I think) with LEAP options, so selection is
limited.
Hope that helped.
Jim
-----Original Message-----
From: jack velte
Sent: Wednesday, July 02, 1997 2:55 AM
To: Jim Greening
Subject: Re: BBY, GTE, & UCL
would you explain to the group your reasoning why you choose leaps over
stocks and visa-versa? thanks.
faithfully,
-jack
|