Posted by fixdgear on 21st of Jan 2011 at 07:49 am
what was asked for was a simple general over view.. dont
confuse the issue here by formulating a more complicated
situation.
besides for me i disagree on which options to buy
and why...i wanted more time on LNG as it can be very volatile....i
wanted to be long and just added a few calls to my stock position
to pizaz it up with very little risk....if LNG takes off lets
say...ill could sell my june 6 calls for a profit plus a free ride
on the jan 8 calls....i do not want to write any calls against my
stock position. another note i am in the black on both these
options as i bought them when the stock was lower...so....im ok
here...cheers!
The best way to lower your risk is sell the stock and buy In the
money calls for June. You can use the
left over money for other trades. A simple stock
substitution strategy. I like the 5.00 strike
better than the 6.00 because you have a higher delta.
Posted by fixdgear on 21st of Jan 2011 at 09:47 am
i want to be long....i do not want to short the stock...my loss
is unlimited....the stock will always move in greater tandem than
the option...the option time premium will run out as well....i may
need to hold the stock a little longer than anticipated while
option time premium runs out....like i said i just wanted to add a
little to my long position with virtually little risk of
capital....if i want to short a stock ill buy puts.
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options
how to choose options?
Posted by fixdgear on 21st of Jan 2011 at 07:49 am
what was asked for was a simple general over view.. dont confuse the issue here by formulating a more complicated situation.
besides for me i disagree on which options to buy and why...i wanted more time on LNG as it can be very volatile....i wanted to be long and just added a few calls to my stock position to pizaz it up with very little risk....if LNG takes off lets say...ill could sell my june 6 calls for a profit plus a free ride on the jan 8 calls....i do not want to write any calls against my stock position. another note i am in the black on both these options as i bought them when the stock was lower...so....im ok here...cheers!
take off risk
Posted by zach06 on 21st of Jan 2011 at 08:35 am
The best way to lower your risk is sell the stock and buy In the money calls for June. You can use the left over money for other trades. A simple stock substitution strategy. I like the 5.00 strike better than the 6.00 because you have a higher delta.
why would i do that?
Posted by fixdgear on 21st of Jan 2011 at 09:47 am
i want to be long....i do not want to short the stock...my loss is unlimited....the stock will always move in greater tandem than the option...the option time premium will run out as well....i may need to hold the stock a little longer than anticipated while option time premium runs out....like i said i just wanted to add a little to my long position with virtually little risk of capital....if i want to short a stock ill buy puts.