lol i didnt check your maths, but the principles behind what you said was correct!
SP goes up alot- options go up more than the heads
SP goes down alot - options lose 100%
SP goes sideway - options lose a little bit
Thats the basic principle of options. If the SP goes up a lot you are laughing. If it goes sideways or down, you will end up behind.
You need to have a lot of confidence or be quite risk tolerant to invest in options.
Or understand the mechanics behind decreasing capital while maintaining equal exposure to the company ( as GS alluded to in his earlier post). What GS talked about is using options to leverage the upside which is essentially decreasing risk by decreasing initial upfront capital required.
- Forums
- ASX - By Stock
- CCC
- options query
options query, page-10
-
- There are more pages in this discussion • 5 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)