Know everything???? Heck, if I knew everything I wouldn't be underwater with my options!!! LOL!
Got rid of 10 of them at the open at $.12. I like the gap up at open. As I write this, Dell has come down a bit and my options are now $.07 (not far from the $.05 that I predicted!). But again, I like the gap up open. "Ususally" when this happens, the stock will go higher after a pullback. No, not 100% of the time, but "usually". I'm still holding 20 contracts.
LOL you're calling me the pessimist when I'm the one who bought puts while you bought the calls. I'm just being realistic. There is plenty of market volatility tomorrow that will drive this up or down...the premiums are far from worthless. I'm not going to argue with you any longer cause the specultation at this point in time here is pointless. We'll see who's right tomorrow morning take care
Good point, but the 10% is your max, and you need to be in those types of stocks with a good knowledge on the technicals. It works like a charm almost always. With a win rate of more than 85%, but you really need to know what you are buying.
Just look at CME today, some options bought few weeks back could have made a killing....
Risking 10% of your money on options is utterly stupid. I only risk at most 1% of my total investment play money on any options. Heck, you can be out of the market broke in a few months risking 10% on buying options!!!
Your other advice is good, if you can call the market direction. But if you are wrong on market direction, then you'll lose even when you position yourself slowly.
This is not a highly volatile stock. I don't think I have a chance in hell at $13 strike price in 3 weeks. And you just can't ignore the heavy premiums before earnings. Those will disapear both on the calls and puts.
You're an optimist while I'm a pessimist.
You know the definition of a pessimist? Answer: An experienced optimist! :-)
With 30 contracts your commission at WWW.optionshouse would be $9.95 flat rate. Anyone who trades a large number of contracts Optionshouse is hard to beat. I've been with them a month and am saving a lot on option commissions.
I usually position myself by buying a few options at a time. I rather pay $1/contract than $10 each time. My gamble on earnings is different, and you are correct, I would have benefited from a flat fee structure. But generally, when I buy only a few contracts at a time and keep adding, then it's alot cheaper at $1/contract.
I've saved alot by going with Tradestation and IB (I have accounts with both).
There is a heavy premium on options right before earnings. The day after earnings, the premium is wiped out. I paid $.14/share for the June $13 calls. They expire in 3 weeks. I'm betting my calls will be worth about $.05 tomorrow.
I bought 30 options which is $420 (3000 X .14) + $30 commission. So I spent $450 total. At $.05/share, I can sell for $150 less $30 commission, so $120. $450 less $120 is a $330 loss on this gamble. No, it won't make me broke, but it just pisses me off as I can't make any money anywhere!