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Intel Corporation Message Board

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  • mikebert mikebert Mar 29, 1998 3:17 PM Flag

    mikebert-an idea for you

    I set my limit at 65 because that's what the model said. If it were to actually fall below 70 I might try to use TA to pick a price, if I was watching, but I wanted a limit order in because if it did fall to 65 and I wasn't paying close attention and missed it, I would be pissed :)

    I am not very familiar with options and I didn't understand your post. Could you explain it to me a little slower please? Think of me as "optionally-challenged" :)

    I am aware that one can do things with options that one can't with stock, and am always interested in learning more.

    I spend a lot of time on the INTC board, because this board is a good proxy discussion for the market as a whole.

    Thanks

    Mike

    P.S. take a look at my webpage (see my profile) for a view on the overall market. If you do, send me an E-mail telling me what you think. Maybe we can get together at Damon's sometime :)

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    • cause they got the tv. on to cnbc-damons got those games

      options are really easy. they are contracts- pure and simple-an call is an option to buy and a put is an option to sell.
      they have a time limit. an april expires in april-a july in july. some stocks go way out (they are called leaps). all option k's
      for us stocks expire on the third friday of the month. Thus they have a time limit and a set price (called the "strike" price).
      and just like you can go long or short of a stock you can go long or short of an option contract. Thus if you "short" a put -you
      actually are going long the underlying stock-you are giving someone the right to put the stock to you (sell it) at a set price -the
      strike-during the set month. For this right they pay a premium since it is their option to go ahead or not. but they pay you for that
      right. A january ('99) put closed at $13.00 per share on friday. So if you sell 10 (each contract is for 100 shares) you would be
      "buying" 1000 shares.-now since the buyer of the put is paying you 13,000. and he can sell you the stock at 80 (80,000.) -should he
      do that-he might do it if the stock in jan"99 is 76 pershare your purchase price is $67 per share (80-13). the limitation is
      that if the stock goes to 100 you still only make the 13 bucks.-on the other hand it must decline below 67 before you start
      losing. in the meantime you can short the stock itself to limit your loss-an advantage is that you only need collateral in your
      account. you can own and collect interest on us. treas. during the time.it's a nice way to earn money as long as you want to own the
      stock at a set price.incidentally the opposite is also true. You can buy the stock and sell calls above the market e.g. 80's-or
      not own the stock and just sell put and calls at the same strike price-it's called a strangle. just imagine one paying you 13 to
      sell the stock and one paying you 13 to buy. if the stock never movesbeyond a limited price or trading range you pocket all the
      money-of course the reason intel options have a hefty premium is because the stock is volatile.i'll look at your profile later-and
      i'll let you know next time i'm hoping a flyer.

 
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