Sunnyskies, thing with the opies is that even though they trade in one tenth increments, they move in half cent increments. That's what makes them great for leverage. So of course if you have close stops you can easily be taken out. The way I look at the oppies is that you own an option that gives you the right but not the obligation to buy the shares for 10 cents between now and Sept when they expire and in this way, at current prices, if I want I can control 3 times as many shares for the same outlay. I am interested in the share price much more than the option price even though I own more options than shares. This is because if the share price is say 20 cents I know I can always still buy shares at 10 cents by exersising the option. If the sp is say $1.00 I can still buy shares at 10 cents and so on. So by paying the option premium I have locked in a buying price of 10 cents. Its all about how you percieve the option. Hope this helps.
- Forums
- ASX - By Stock
- FDL
- using oppies to gain leverage
FDL
flinders diamonds limited
using oppies to gain leverage, page-18
-
- There are more pages in this discussion • 30 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
NEWS
Breakthrough programs slash healthcare events, driving a significant A$1.8M+ annual revenue boost
CC9
Chariot Corporation (ASX:CC9) refines Black Mountain strategy, launching Pilot Mine to seize U.S. lithium opportunity