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Jim,
Each call or put option is usually on 100 shares of stock (It can
be different after splits). Assuming you get in at the current asked
price, you would need 10 options at the cost of $162.50 per option or
a total cost of $1,625 plus commissions. You must trade options in a
margin account that has been approved for options trading so you may
have to fill out some paperwork first if you haven't traded options
before. Options are extremely leveraged and very volatile, especially
if you are using out of the money options as I am here. So watch out!
I'd highly recommend Lawrence G. McMillan's book "Options as a
Strategic Investment" if you don't understand options. It will take a
while to wade through it, but you will completely understand options
by the time you finish <G>.
Jim
-----Original Message-----
From: Jim DeWilder <jdewilder@xxxxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Saturday, August 29, 1998 7:45 PM
Subject: Re: Weekly Pick-Help
>Jim,
>
>Please help me with understanding the option business. If I want to
buy put
>options worth 1000 shares, not including commissions, how much would
that
>cost(i.e. $1625.00, etc). I need this information before I plunge in.
FWIW,
>I agree that this candidate is ripe for a fall. It came out with one
of my
>scans as a potential candidate. Thanks again.
>
>Jim
>
>-----Original Message-----
>From: Jim Greening <JimGinVA@xxxxxxxxxxxxx>
>To: Metastock <metastock@xxxxxxxxxxxxx>
>Date: Saturday, August 29, 1998 1:24 PM
>Subject: Weekly Pick
>
>
> Since I'm
>>expecting a sharp drop to under 40, I decided on the Out of The
Money
>>(OTM) Dec 40 Put options ( LDQXH - Bid 1.375, asked 1.625). Going
>>this far OTM gives me much greater leverage at increased risk.
>>However, the amount at risk for 1000 shares is small compared to the
>>amount at risk shorting the same number of shares and the reward for
a
>>large move is essentially the same.
>
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