Playing Rolling options

Discussion in 'Options' started by carpunky, Nov 14, 2005.

  1. carpunky



    first time poster , Just wondering if anyone has had any luck trading options in which the underlying stock is rolling.

    A good example would be Lucent :

    .VEUAA LU Jan, 2007 5 call

    This has constantly been rolling between .10 and .20

    Of course this could be done with other stock options but this has alot of volume.

    Also, another one of my silly thoughts is just to buy 100 contracts of this every year in leaps and wait to see if it can ever get past $10 and if it would ever go back up to $70 those 100 contracts that I payed $1000 for would be worth $700,000 of course thats dreaming but its a better chance than buying 1,000 in lotto tickets and scratch off's every year .
  2. my only thought is how easy is it to actually get filled with market makers competing..

    What's the size of the bid and offer?

    Cus if it's like 10k then a few hundred shares a day isn't going to net a fill... at least that's my initial thought.
  3. Never tried often do they cycle?
  4. carpunky


    It looks like it is playable this way 2 to 3 times a month, of course , I'm not a big player and was only planning on rolling 50 contracts at a time .

    If only rolled once that would be a profit of $500 minus commisions...which would probally be $100 , so you would clear $400 ...then I would either by the puts and ride it back down again or wait for the options to drop again and get back in buying the same 50 contracts. If i remember right LU has been trading in this range for the last 3 years.