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Premium is highest at the money. I like the behavior of DIM delta which is
high and increases as price declines and high and decreases as price rises.
Also, one is paying for very little premium and they often have the lowest
implied volatilities. It does not bother me to pay $13K for a put which is
mostly equity vs a few hundred dollars for something which out of the money
and all premium.
Earl
----- Original Message -----
From: "Navtej S. Nandra (RR)" <nnandra@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Saturday, September 20, 2003 10:20 AM
Subject: Re: [RT] Is this divergence for real?
> Earl,
> Probably a dumb question: Why deep in the money vs. at the money?
> Thanks,
> n
>
> ----- Original Message -----
> From: "EarlA" <earl.a@xxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Friday, September 19, 2003 5:50 PM
> Subject: Re: [RT] Is this divergence for real?
>
>
> > Yes, I have major divergences in my breadth models ringing amid other
> > warnings. However no guarantee that the top is in and I could see a run
to
> > 1080-90. I started scaling in a short position yesterday at 1040 buying
> deep
> > in money March 2004 LEAP Puts at 1150 strike. I consider an implied
> > volatility of 16% to be a bargain. I'm not good enough at top picking to
> > nail the exact top.
> >
> > Earl
> >
> > ----- Original Message -----
> > From: "Navtej S. Nandra (RR)" <nnandra@xxxxxxxxxx>
> > To: "swingmachine" <swingmachine@xxxxxxxxxxxxxxx>;
> > <realtraders@xxxxxxxxxxxxxxx>
> > Sent: Friday, September 19, 2003 12:35 PM
> > Subject: [RT] Is this divergence for real?
> >
> >
> > Please see attached; anyone else showing a possible near term top?
> > N
> >
> >
> >
> > To unsubscribe from this group, send an email to:
> > realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> > Your use of Yahoo! Groups is subject to
http://docs.yahoo.com/info/terms/
> >
> >
>
>
>
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