<p>DrGoogle, do you mean that you are trading in options where the price for 1 contract might be $1800? Are you mostly selling options, buying, or setting up spreads? I’m a little confused because dstark was asking you about exercising calls, but you wrote, “option lost most of it’s value down to less than $1” – which sounds more like the position you would want to be in holding a short option… unless you are referring to time value. </p>
<p>I agree with you about closing - if I can keep 80% of the trade value, after accounting for commissions, I’m very happy. I’m not going to sit around waiting… I’ve learned the hard way that sometimes there are big reversals in the market in the days leading up to option expiration.</p>
<p>But your math is off - $17/$18 is 94% (not “almost 90%” but “well over 90%”). </p>
<p>Calmom, I’m confused about your question. Maybe I should go to bed, it’s getting late.
I think dstark mentioned long calls on a stock, I thought he mentioned call options that was in the money, which I didn’t think I ever kept till the end. I often closed it with the premium either increased or decreased so I never had to deal with dividends.
When I referred to $18 down to $1, it usually when I sell naked puts at $18, with the intention of buying the stock when it’s assigned to me but sometimes the stock price were above the option price and lost the time and intrinsic value.
For example, let’s say I sold 1 DIS contract for Jan 16 100 puts for $18(hypothetical), when the value gets to $1 then I closed it out regardless of where I am in time frame.
So yes the 90 % is guesstimate.
Bottom line is I never wait until the last minute so I never know.</p>
<p>It depends on the stock. Some I just sell at the price the stock is at. If I’m bullish I might add a small percentage of increase to the stock price.</p>
<p>Anyone with opinions on companies such as the Carlyle Group and on private-equities in general?
<a href=“http://www.carlyle.com/”>http://www.carlyle.com/</a>
DS who obviously has totally different criteria sees this as one area in a portfolio. I have for quite some time gone with very low cost unmanaged index funds and ETFs, and wasn’t even aware of the “private-equity” industry.</p>
<p>Anybody have any good stock suggestions. For quite a while, I go longer during Fed days because the market stupidly sells off because of fear of changing statements which hasn’t happened for a while. Tomorrow, for the first time in a long time, I’m not sure which way they’re going. If the market goes up on any news, I’ll probably add to some short positions and if it goes down I’ll add to long positions.</p>
<p>I own TGT(Target), a play on the cheap gas therefore more money in consumer pockets. Plus every since HD got security breach, it seems like people forget about TGT security breach. It will be a nice bounce for Xmas season.</p>
<p>The. Fed’s future rate projections starting in mid march or so are pretty aggressive. I have my doubts but I would like to see these rates. Normal rates by the end of 2017. </p>
<p>It’s kind of funny to watch all these big institutions trying to invest in BABA when none of them seem to realize that they are not investing in the company and will own no shares of the company despite all the money they are paying. They will be owning rights to some holding company in the cayman islands. China won’t permit foreign investment in BABA but BABA has no problem taking American’s money and pretending to give them some value. This is a greater fools theory. I wonder what will happen if someone notices the Emperor’s new clothes aren’t clothes at all. </p>
<p>The big institutions understand full well what they’re getting. They may turn out to have made a bad bet, but it won’t be because they didn’t understand Alibaba.</p>
<p>RWLK is an extremely small company at this point. A speculation. Its never made a profit, and its sales last year were less than $2million. It has very few employees, and they’re spread out among three continents. I suppose there is some chance that they turn into something and maybe could be sold to another company, but its a big risk and a long row to hoe. The float is quite small in todays market, so there isn’t much room for institutional participation.</p>
<p>I don’t think I’d allocate much towards it at this price level. </p>
<p>If you check out the volume of some of the call options that expire in two days, you will see very large volumes in certain strikes. They are the dividend plays for tomorrow. 180 calls . 185 calls. 190 calls. 195, 196, 197 and 198 calls…</p>
<p>Those are dividend plays. Traders put on spreads. They exercise their long side and they hope that some options on their sell side are not assigned.</p>
<p>For example, traders can buy and sell the 197-198 call spread for a dollar. Let’s just look at the 198 calls. The trader execises those calls. Hopes some of the 197 calls are not exercised. The trader can unwind the trade tomorrow or in all likelihood… The 197 calls will expire in the money. The trader will be out of the trade and he or she will pocket the dividend for every option that wasn’t assigned. </p>
<p>It takes a good size chunk of money to do these trades in any size. You have to be able to hold the etf overnight and the etf is not a low priced etf.</p>
<p>Looks like above 198, the traders don’t want to do the dividend play. Too much risk with the dividend as the sole reward. </p>
<p>I did do some above 198. Cost is the commissions and the risk is the etf breaks in price. </p>