Call options and dividend?

Discussion in 'Options' started by mizhael, Jan 25, 2009.

  1. spindr0

    spindr0

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    I don't think there is enough time. Even if the stock price doubles by Feb 13th (with 1 week till the expiration), I do not think the option will appreciate much.
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    Use a pricing model to determine possible future prices. Here's one:

    http://www.cboe.com/framed/IVolfram...ADING_TOOLS&title=CBOE - IVolatility Services
     
    #21     Jan 26, 2009
  2. The April 20s do exist. They are the converted MER. I think at .85? Is that what BAC paid for that overpriced firm. Thain was a great salesman. He robbed Ken Lewis blind...

    Guys/gals, all of you have to have a positive mental attitude! The Messiah has arrived! All your problems will be solved.

    If you believe, the Messiah can make your way, way, way OTM options spring back to life...

    I can see the $$$ now...

    Believe! Yes we can! Yes we can! Yes we can!

    P.S. the option writers thank you...:)
     
    #22     Jan 26, 2009
  3. Find God.
     
    #23     Jan 26, 2009
  4. spindr0

    spindr0

    ROFLMAO. I'd like to say that I sit here corrected but I won't stand for that!

    You're suggesting that a guy who wants to know how to calculate the future price of an option should roll a call worth two cts into an adjusted MER contract comprised of less than 100 BAC shares and cash in lieu of fractional shares?? (eye roll)

    As the newly arrived messiah, you should donate time to a non-prophet organization!
     
    #24     Jan 26, 2009
  5. On a more serious note, the OP should ask himself why he established this position in the first place?

    The BAC/MER combined firm will probably continue to report losses and they will need additional capital, diluting the shareholders even further, which will depress the price of BAC stock and related options.

    Since the Op bought the Feb 20s, time is nigh and even if the SP500 rallied to the 880 - 900 range in the next 5 to 7 days, the Feb 20s will still be way under water, but he might (I say might very lightly) be able to recover 2 to 3 cents.

    With a new Sec. of Treasury, he might announce a new super govt bad bank model ala RTC from the 1980's.

    Sit tight, watch and pray for a rally in the financials...
     
    #25     Jan 26, 2009
  6. Trading options without understanding them is an efficient way to lose money quickly.

    I strongly suggest you find software or a website that lets you model positions. Then get a feel for how time, changes in volatility, etc. affect them.

    The CBOE learning center has lots of free info on the basics:
    http://www.cboe.com/LearnCenter/default.aspx

    To include a free program that's not very sophisticated but will get you started:
    http://www.cboe.com/LearnCenter/Software.aspx
     
    #26     Jan 26, 2009
  7. spindr0

    spindr0

    Well, ya never know. BAC IV could like well maybe double like to say maybe 750 or something, ya know? (Valley Girl stare)
     
    #27     Jan 26, 2009