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I have learned the same lesson over the last several months I have started
trading options. Deep in the money options carry least amount of premium. and
therefore more closely resemble the stock price movement (Delta near 1).
On IBM, a ratiobackspread (sell 100c, buy 105 c: 2to 3 for each sold) may have
an excellent upside potential, and limit the downsidel risk. Any coments?
Girish Patel
girish@xxxxxxxxxxx
Joe Frabosilio wrote:
> Hi Brent,
>
> When I first started buy options, I bought out of the money. They were
> cheap and I could buy 10 contracts. THIS IS A BIG MISTAKE!!!!!!!! My
> luck was not 90% of the time a loss it was 100% of the time. It wasn't
> until I started buying deep in the money that I started making money. At
> the money was fair for me. In the money and being able to buy the
> spread is where it is at.
>
> Happy New Year
> Joe Frabosilio
>
> Brent Aston wrote:
> >
> > RT's, I've heard tht about 90% of all options purchased out of the momey
> > expire worhtless. Can anyone confirm/disprove this with market statistics?
> >
> > Brent
> >
> > ----------
> > > From: THE DOCTOR <droex@xxxxxxxxxxxx>
> > > To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> > > Subject: Re: Stocks vs Commodities
> > > Date: Tuesday, December 30, 1997 9:38 PM
> > >
> > > David,
> > >
> > >
> > > Just so you know 30% of options expire worthless and over 60% of option
> > > traders, when asked, consider themselves successful. Your post just
> > > repeats some common pieces of misinformation.
> > >
> > > Additionally if 90 % of something happened all the time the world would
> > > evolve and the losers would eventually die out.
> > >
> > > For the last 12 calander quarters buyers of options have faired better
> > > than sellers in 10 of the 12.
> > >
> > > The CBOE and OCC both print markey statistics books every year. They
> > > are free...you really out to get the facts.
> > >
> > > Send me your address and I'll have one sent to you.
> > >
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