You might consider waiting to see some evidence that individual stocks or the market is reacting to something that hasn't happened yet. Or, you could invest in cemetery plots Do you think that might have something to do with a price of 75 at 30 days out and at 90 at expiration? (in his hypothetical analysis) I rrreally need this lunch time dead zone to end (eye roll)
I look at options as more of an insurance policy than as a big money maker. You can't buy health insurance when you have a pre-existing condition (at least not yet.) But yes, I was thinking of just monitoring the CDC information over the next weeks to see if there was a pattern of an increase in outbreaks. I agree it would be prudent to hold off until at least there are some small signs the likelihood of the situation worsening rear their ugly heads. There should be adequate vaccine to limit the deaths though this time around so I'll pass on the cemetery plots (LOL).
What's a good risk/reward on say an option expiring 6 months out. (That recommendation for that free software turned out to be $3000 software). I was looking at some put options and calculating the return assuming a target stock price at expiration. I looked at 5 strike prices and the return ranged from 51% to 85%. Then just a minute ago by chance I saw one of the puts jump down so that the return would be 138%.
Options aren't like pre-existing conditions and health insurance. You can trade them anytime the market is open. IMHO, the CDC info is irrelevant. It's the reaction to the news that you want watch for. When the media is blasting fear to the streets and the stocks starts reacting, that's the time to trade. Waiting is a reasonable idea because you'll have approx 25 cts of time decay per month if you buy now. I'd rather have that in my pocket as dry powder and be able to buy more calls later if there's a reason to buy.
Start with this website (and for educational articles/webcasts): http://www.discoveroptions.com/public/pages/resources/tools.html More software info: http://www.option-trading-software.com/ http://www.hoadley.net/options/options.htm http://www.voptions.com/
Just caught that. I forgot to change the volitility to 25% from 42%. With 179 days it is now $2.01 The end numbers still came out the same for 30 days left and at exp.
Before you speculate on the Swine Flu, Bubonic Plague or the next meteor to strike the earth, go read a few books on options. "It is better to remain silent and be thought a fool, then to open one's mouth and remove all doubt."