Right price for buying calls and puts...

[deanbush@xxxxxxxxxxxxxx (Bush, Dean)]

 Happy New Year to all of you!
Before hand, I know that a lot of variables come into play regarding the
"right" price for purchasing options, but in general would all of you
recommend buying calls and puts that are (1) slightly out of the money, (2)
at the money, or (3) slight in the money?  
   I feel that I may have made a mistake of buying the wrong call option on
IBM:  I purchased 10 contracts of the IBM Jan 105 on Monday.  The price has
hit 105 every day (including today), but just doesn't seem to want to
breakout above the 105 mark.
   I thought that on the good news of their upcoming compact hard disk as
well as upgrade by brokers today that it might close above 105.
  What do you have to say about my move, or IBM in general?  Thanks for
your comments!
Dean
Dean Bush
7433 Beach Drive 
Panama City Beach, FL 32408
Phone:  (850) 230-DEAN