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First post on this did not appear and thought it might be of interest to
some
>To List:
>
>Recently came across this and hope it is OK to post before I get my friend
>Mark's approval.
>
>Option trading-
>
>Review the market each day to find which are in a high state of
>volatility.If the current implied volatility is greater than that market's
>historical vlatility,it means those options are "more expensive",relative
>to the norm for that market.In effect we can sell "overpriced" options.They
>are overpriceed relative to historical pricing.
>
>Next we look at the price of those options compared to the Black-Scholes
>option pricing model.We sell the option only if it is trading at a minimum
>of twice its theoretical value.
>
>Lastly we sell an option only within 60 days of expiration which means it
>is in its most rapid period of time decay.
>
>80% expire worthless and 20% do not from what I have seen.The person who
>is teaching me this ran up a test account from $3500 to $16,000 from
>April,'99 to now.
>
>Sincerely,
>
>John
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