I too traded trhe old PCO. I wish I had held all
of the "parts" since they sure add up to a lot more
than the old whole used to be worth. With the options,
however, I found that if I placed a bid or offer out there
at my desired price level, I would usually get my
order filled. I would never recommend to anyone to just
send a market order out there, since, as you say, the
option spreads are fairly wide. However, I never send a
market order out in anything, unless I need to make the
trade immediately, or unless the market is 1/16 of a
point wide. Good luck!
A couple of years ago I used to write covered
PZB or its predecessor stocks (larger parts
I found the options didn't trade
very much and had
pretty wide spreads as a percent
of the value of the
option. Now I just hold PZB
stock without any option
write. If five years or so,
and having sold the Minerals
and the Air Transport
parts when they were issued, I've
got a very good
increase in this holding. It can also
keep going up for
a long time to come.
You can also access the quotes on options at
www.phlx.com by looking on the left side of the page, clicking
on "more quick quote and trade info", and at the
bottom of the green area, click on "Option Chain". That
will bring you to a screen in which you enter the
stock symbol and click "view all options and leaps for
this symbol" and you will get quotes for any option on
this or any other stock. It takes a few clicks to get
there, but if you bookmark the page for the option
chain, you can get to it quickly. Hope this helps.
You can get the previous day's close for all puts
and calls at
Just click option chain after you've looked up the
security that you're interested in.
quotes I use Schwab. Also a lot of info at the CBOE
Hope this helps,
Dean Witter set it up for me to trade in options.
Since that's pretty speculative stuff, they did make me
jump through a lot of hoops. But your broker can get
you the forms and submit them for you. Once you're
approved, it's the same as trading in the primary
stock,except that you'll have to call your broker for the
going price. You can't look it up on the Internet so
far as I know.
If you believe that a stock will
trade flat (ie. stay at about the same price as it is
now) or up slightly between now and expiration, you
could buy the stock and sell the just out of the money
call, as a way of taking in income. The only thing you
give up is the appreciation of the stock price above
the option strike price. For example, if you buy XYZ
stock at 38, and sell the July 40 calls at 2, you put
up $3600 (3800 - 200) in a cash account. If, on the
third Friday of July, the stock is below $40, you
simply keep the $2 that you sold the option for. If the
stock is above $40, you make $400 on a $3600 investment
for 1 1/2 months. That's a pretty good rate of
return!!! If, however, the stock was to go to $60 before
expiration, you would have made more by NOT selling the call.
That is why it only works in stocks that don't have a
history of high volatility. If you don't understand
something I've said, post here and I'll do my best to
explain. Good luck.
I was directed to you for helpful hints on
writing covered calls. I have never done that before and
was wondering what sort of situations I should expect
or look for to make a profit. I am also concerned a
little anyways about the costs involved.
How did you find the ability to trade the
options? Did they make a market for you, or did they run
away from your bid. In my experience, I've had no
trouble trading the options on this stock, but I was
wondering about your experience. Thanks.
pzb is a pretty stodgy stock. Don't look for much
movement unless there is a buy-out. If that's what you're
betting on, consider call options. I bought options to
buy 2000 shares in august at $40. Cost me $2,500.
Could lose the whole $2500 if the stock tanks. But if
it is bought out i stand to make a bundle off a
fairly small investment.