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Posted: 8/1/2009 4:46:12 PM EST
I bought some JNJ about 2-3 months ago @ $54ish.

It ran up to $59, but has just kind of sat there until late last week, where I wrote a $65/Jan 2010 call and collected $70 in premium for one contract after commish.

It seems like RIGHT AFTER I wrote the call, the stock started shooting up. I told myself when I wrote the call I would be happy selling my JNJ @ $65 next Jan, but the timing just sucks. Now the stock is around $61 and the call is trading about $1.50ish.

Do you guys use any software to help you with your option writing decisions?
Link Posted: 8/1/2009 4:49:59 PM EST
[Last Edit: 8/1/2009 4:50:14 PM EST by raven]
No, but there is a call-in radio show on Tuesdays that can help you.

Tom Sosnoff, founder of http://www.thinkorswim.com

Tuesday 11 AM to Noon EST

877-927-6648


Link Posted: 8/1/2009 4:50:20 PM EST
I worked supporting IT for a few trading desks on Wall St. in the 90's, you will lose this game if you are asking this question on a general discussion firearms forum.
Link Posted: 8/1/2009 4:53:54 PM EST
[Last Edit: 8/1/2009 4:57:33 PM EST by raven]
If you own the stock, why would you write calls against it unless you were expecting it to fall?

If you were expecting it to fall, why didn't you just sell it? Or buy puts to hedge?I guess writing calls on something you expect to fall in price is a hedge too.
Link Posted: 8/1/2009 4:54:13 PM EST
Originally Posted By capnrob97:
I worked supporting IT for a few trading desks on Wall St. in the 90's, you will lose this game if you are asking this question on a general discussion firearms forum.


Oh absolutely I know how that works.

I just figured maybe someone here wanted to BS about this kind of stuff.
Link Posted: 8/1/2009 4:57:08 PM EST
Originally Posted By raven:
If you own the stock, why would you write calls against it unless you were expecting it to fall?

If you were expecting it to fall, why didn't you just sell it? Or buy puts to hedge?


When I wrote the call, the stock was 10% out of the money for the call option. JNJ is a pretty sleepy stock and 5% is a big move for this stock in a week.

I told myself when I wrote the call that i'd have no issues if it was called away @ $65. I'd still make over $1100 on a $5400 investment. (shrugs)

I just wasn't expecting it to take off the millisecond after I wrote the call. LOL
Link Posted: 8/1/2009 4:57:26 PM EST
Originally Posted By capnrob97:
I worked supporting IT for a few trading desks on Wall St. in the 90's, you will lose this game if you are asking this question on a general discussion firearms forum.


+1. options are gambling, not investing. with options the house wins 99.5% of the time. study probability theory, it is your only hope - but even then you're still screwed.
Link Posted: 8/1/2009 5:00:04 PM EST
[Last Edit: 8/1/2009 5:00:17 PM EST by raven]

Originally Posted By aplehr:
Originally Posted By capnrob97:
I worked supporting IT for a few trading desks on Wall St. in the 90's, you will lose this game if you are asking this question on a general discussion firearms forum.


+1. options are gambling, not investing. with options the house wins 99.5% of the time. study probability theory, it is your only hope - but even then you're still screwed.

'The house' just collects commissions. You trade against a counter party.

And gambling? Life is gambling. If you had to bet on the odds life gives you, you wouldn't take it.
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