When the volume starts drying up the implied volitility goes down with it. Plus it is so close to option expiring that it is losing value there as well. If price really starts moving the IV will start picking back up.
Romik, There's a lot of things to consider for options. My knowledge is pathetic. If you are really interested, you need to read books, options topics in ET + a lot of screen time. Also, you need to sell the option before it expires to collect the $. Please note that you will certainly be getting less than $1 due to spread etc. Can't really help you much on options 'coz my knowledge is real pathetic.
I am revising this due to wrong chart used initially, that mistake in charts has worsen the odds. Current at the time of call: $61.95 100% position PT1: $63.80 PT2: depends Average down: N/A Stop: $58.00 BLDs on a daily chart in MACD/HIST/RSI/CCI. Hard stop will be used below recent reaction low of $58.50, stop $58.00. Weekly and monthly charts are bearish though.
QUOTE]Quote from romik: T (NYSE) AT&T, Inc Current: $27.89 PT1: $26.50 PT2: $25.00 PT3: $23.00 not certain on this one, see below Stop: $29.00 B Class BRD in MACD HIST/BRD in CCI on a daily chart attached. If price fails to go through 28.50 on high volume, then a double top will be in the making and PT3 will be more possible in that case. http://finance.yahoo.com/q?s=T [/QUOTE] +4.98% on 50% position current unrealised -18.22% adjusted total running PnL: -15.72% Well, why don't I close it now and lock in current loss? The answer is a possible 3BRD in MACD and RSI on a daily chart attached. Of course what makes it a possible WRONG (not saying bad here) decision is that weekly and monthly charts are both bullish...not a good sign for this short position. Whatever happens, I will cut the loss above resistance $35.00, so position will be covered @ $35.20 or ~-21.36% on this position (adjusted).
EBAY's weekly chart looking bullish IMHO, if I wasn't maxed out on my virtual capital, I would have added a long position Ebay based on a weekly BLD in MACD. I would say it could be a steady climb from now, making a stop below the reaction low of $22.83 entering with 50% of max position size as there is a 3BRD on a daily chart, so looking set for a pullback and THEN adding another 50% near 20ma and/or lower BB level. Weekly chart here looking bullish IMHO: And a daily chart showing a 3BRD in HIST, pullback expected: I would also buy a mixture of 2 puts contracts for hedging purposes, perhaps Nov 06 27.50/25.00 or just the 27.50 strike.