Ditm

[hitone395]

Hello,

has anyone bought Deep in the money options with a delta close to or at 1.00? that are at least 8 months out.

I figure you really could get a stock for 50% off that moves point for point with a delta of 1. Of course you would sell before expiration so you don't need to put down the other 50%, but take your profits and run....

If anyone has done that please let me know.

[am13539]

Originally Posted by hitone395

Hello,

has anyone bought Deep in the money options with a delta close to or at 1.00? that are at least 8 months out.

I figure you really could get a stock for 50% off that moves point for point with a delta of 1. Of course you would sell before expiration so you don't need to put down the other 50%, but take your profits and run....

If anyone has done that please let me know.

I have not but it is something that I have been looking at recently. I have been following up on Lenny Dykstra's DITM articles and it is certainly something that I want to start doing soon.

[hitone395]

I have read articles by Christopher Rowe of the Tycoon Report. he writes about options. Good educational stuff. Here is a link to his stuff. Tycoon Report

His articles on Delta are wonderful and really usefull.

I like reading Dykstra's stuff.

If you go to CBOE.com they have a simulated account for options. It is pretty cool

[am13539]

Thanks for the link. I did not know about this but definitely seems interesting. Thanks for the info.

[hitone395]

Sorry, the original link did not work. If you go to the 'advanced search' link on the bottom, you can sort by author and get Rowe's articles. I dont' know if I said it before but his articles on Delta are worth a lifetime of education!!!

Pretty good stuff by all of them though. Dylan Jovine does a good job...he is fundamental guy...buy beaten down stocks, not beaten down companies.

The DITM do intrigue me though. Why not buy an option on the stock, pay less money, less risk and greater gains...

[am13539]

Originally Posted by hitone395

Sorry, the original link did not work. If you go to the 'advanced search' link on the bottom, you can sort by author and get Rowe's articles. I dont' know if I said it before but his articles on Delta are worth a lifetime of education!!!

Pretty good stuff by all of them though. Dylan Jovine does a good job...he is fundamental guy...buy beaten down stocks, not beaten down companies.

The DITM do intrigue me though. Why not buy an option on the stock, pay less money, less risk and greater gains...

That's exactly my thinking. You pay less money and have a lot to gain from it. Why not combine both, Rule#1 investing with DITM trading. Seems like a logical concept to me. I'll definitely read up on these authors that you mentioned. thanks.