How would you translate the stock price to an option entry point? Dan mentioned an entry at the 200 dma….where would I set my option purchase price to correspond with that target without sitting and watch when it hits (or bounces prior to the 200 dma?)
that’s a question I have often wondered about,
and i think the answer is there is no perfect correspondence unfortunately.
there’s all those various factors like delta, volatility and time decay, bid and ask, bla bla bla. and so you just sort of have to guestimate according to where the option is now. that being said, i mostly consider delta to determine the approximate price of the option for each increment of movement in the stock….
Looks to me that we’d be better off selling covered call as IV ( implied volatility) on the options is rather high, and we want to sell high volatility rather than buy it. So the put spread is a better strategy than the outright call . My opinion the best would be covered call with a stop on the stock ( can be done in Trade Station I am not sure about other brokers) so you sell the high volatility in the options which with time will decay fast, you could put the stop in break even point.
Dan, It can be a little confusing when you are discussing strike prices and option prices but the only thing you’re showing is the stock chart. Is it possible to put up a table chart next to your stock chart showing the most recent option prices for the strikes you are discussing? This might give some of us a better visual between the strikes, option prices, and how you’re coreelating them to the chart.
Thanks,,,,
How would you translate the stock price to an option entry point? Dan mentioned an entry at the 200 dma….where would I set my option purchase price to correspond with that target without sitting and watch when it hits (or bounces prior to the 200 dma?)
that’s a question I have often wondered about,
and i think the answer is there is no perfect correspondence unfortunately.
there’s all those various factors like delta, volatility and time decay, bid and ask, bla bla bla. and so you just sort of have to guestimate according to where the option is now. that being said, i mostly consider delta to determine the approximate price of the option for each increment of movement in the stock….
Have U asked this question in the forum?
Looks to me that we’d be better off selling covered call as IV ( implied volatility) on the options is rather high, and we want to sell high volatility rather than buy it. So the put spread is a better strategy than the outright call . My opinion the best would be covered call with a stop on the stock ( can be done in Trade Station I am not sure about other brokers) so you sell the high volatility in the options which with time will decay fast, you could put the stop in break even point.
Good trading
Dan, I presume you meant Oct 95 insyead of Oct 85!
Dan, It can be a little confusing when you are discussing strike prices and option prices but the only thing you’re showing is the stock chart. Is it possible to put up a table chart next to your stock chart showing the most recent option prices for the strikes you are discussing? This might give some of us a better visual between the strikes, option prices, and how you’re coreelating them to the chart.
Thanks,,,,