Since84
Moderator
To infinity and beyond!
Posts: 3,933
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Post by Since84 on Oct 26, 2017 2:56:47 GMT -8
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Post by rob_london on Oct 26, 2017 3:11:00 GMT -8
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Post by rickag on Oct 26, 2017 7:39:33 GMT -8
Thank goodness there are writers like John Gruber.
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bud777
fire starter
Posts: 1,354
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Post by bud777 on Oct 26, 2017 9:03:11 GMT -8
I continue to be fascinated by LEAPS and the various strategies they offer. My current interest is in the idea of selling OTM leaps that are 2 years out and rolling them every year. I am making the assumption that no one would have an interest in calling a LEAP, even one ITM if it still has a lot of time value left. For example, if I hold a LEAP due in 2019 that is ITM, the value of the LEAP is based on the intrinsic value (the difference between the strike price and the current price of the stock) and the time value (the premium paid to have the right to buy the stock at the strike price. Think of it as insurance). Both of these are modified by the volatility and share price, but let's ignore that for now. Exercising the option essentially gives up the time value component of the option. It would make more sense to sell the option, then use the money to buy the stock outright.
Suppose that you sold LEAPS due in Jan 2020 today with a strike of 200. You would receive $1150 per contract. If we assume for simplicity that the share price and volatility are constant, in January of 2019, the value of the contract would be $525. The difference is due to the reduced time value. You make $625 per contract with essentially no risk. Rinse and repeat.
Since you will be buying back the old options and selling new ones, the effect of both volatility and share price should roughly cancel out.
My apologies to those here who are old hands at this. I know it must seem pedantic. It is just easier for me to state it this way than as a long question. I believe that in options, there is no free lunch, what am I missing?
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chinacat
Moderator
AAPL Long since 2006
Posts: 4,433
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Post by chinacat on Oct 26, 2017 10:08:58 GMT -8
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Post by dreamRaj on Oct 26, 2017 10:34:20 GMT -8
Since when did 'The Street' become so anti-Apple? They've been writing a lot of FUD about Apple of late.
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Post by incorrigible on Oct 26, 2017 11:48:26 GMT -8
If we assume for simplicity that the share price and volatility are constant, There's the rub. That never happens IMO. I gave up on all options now that I'm older and retired. I made some serious $ in options and then proceeded to lose a lot also. Can't afford that risk now. It can be fun though when you make a lot of money very quickly. Be prepared to lose it all though just in case.
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Post by dreamRaj on Oct 26, 2017 12:30:12 GMT -8
AMZN, GOOG and MSFT are all up after-hours with decent earnings beat. Although FB didn't report today, it's also up by 3 bucks.
It's our turn now. Same time, same day, next week.
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Post by macster on Oct 26, 2017 15:31:23 GMT -8
Amazon said Whole Foods contributed $1.3 billion in sales this past quarter, which ended Sept. 30. Not a whole lot to help 's bottom line but.....Tim Cook and the board hear hear. A major profitable acquisition can stabilize the bottom line is slow quarters.
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Post by BillH on Oct 26, 2017 20:56:21 GMT -8
Out with the VI, in with the X. Got coffee??
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Post by dreamRaj on Oct 26, 2017 22:52:45 GMT -8
Rocket X takes off in 8 minutes!!
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Post by dreamRaj on Oct 26, 2017 23:09:35 GMT -8
Got the 256GB Silver. Looks classy and has black front now.
$1250.97 with tax.
Delivers Nov 10-17.
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Post by rob_london on Oct 26, 2017 23:13:51 GMT -8
Ordered the 256GB Silver through the Apple website. Delivers 13-20 November. Update: 8:17 and the delivery time is now 4-5 weeks!
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Post by BillH on Oct 26, 2017 23:27:12 GMT -8
256GB Space Grey for me. Had a bit of a wait to even get in the store. Guessing 2:10 CDT or so. Delivers November 17-24. Tried to order my wife's and received this message. "Your iPhone has been reserved.
Your reservation number is: not saying When we’re able to reach the carrier systems, we will email you at notsaying@gmail.com. The email will include instructions to complete your order as well as the return link. You will have 24 hours from the time the email is sent to return to the Apple Online store to proceed with your order. If you do not complete your purchase within 24 hours, your reservation will be canceled.
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Post by joel90069 on Oct 26, 2017 23:31:39 GMT -8
Ordered 256GB Space Grey. Delivery Nov 3 but gave me a reservation number and said one was being held for me because they couldn’t reach my carrier. I will receive an email telling me how to proceed and I must complete the transaction within 24 hours. Anyone else get a similar message?
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Post by BillH on Oct 26, 2017 23:38:21 GMT -8
Ordered 256GB Space Grey. Delivery Nov 3 but gave me a reservation number and said one was being held for me because they couldn’t reach my carrier. I will receive an email telling me how to proceed and I must complete the transaction within 24 hours. Anyone else get a similar message? Yup.
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Post by joel90069 on Oct 26, 2017 23:40:22 GMT -8
Ordered 256GB Space Grey. Delivery Nov 3 but gave me a reservation number and said one was being held for me because they couldn’t reach my carrier. I will receive an email telling me how to proceed and I must complete the transaction within 24 hours. Anyone else get a similar message? Yup. Just noticed you posted similar. I hope it sorts out correctly!
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Post by dreamRaj on Oct 26, 2017 23:57:44 GMT -8
Many were complaining in the first few minutes that the store isn't back up yet on the website. It's true because I was trying to order on both the website and my iPhone just to be sure I get through. The store was up at 12:01:30 for me and I was done by 12:05.
Can't wait!
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