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At the money puts and calls usually have a delta of 50 or -50 (puts). Delta
increases as the contract moves toward and then into in-the-money. The
deeper the contract is in-the-money, the greater (higher) the delta. Time
also has an effect on the delta as the option approaches expiration but I
don't believe that was the issue here.
Regards,
Tom Alexander
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> From: James inLA <JamesinLA@xxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: Right price for buying calls and puts...
> Date: Wednesday, December 31, 1997 12:25 PM
>
> In a message dated 97-12-31 11:58:26 EST, you write:
>
> << 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? >>
>
> Dean,
> In general, I usually try to buy at the money. At the money has the
greatest
> delta. However, this depends on what your expectation of the
underlying's
> move will be. By the way, I also have IBM 105 Jan calls.
>
> Jim
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