Follow up question:

here is April 2012 put option price as of today's closing:

Put Options

Expire at close Friday, April 20, 2012

Strike	Symbol	Last	Chg	Bid	Ask	Vol	Open Int
2.00	KBH120421P00002000	0.06	0.00	0.02	0.15	0	324
3.00	KBH120421P00003000	0.16	0.00	0.06	0.15	0	351
4.00	KBH120421P00004000	0.18	0.00	0.13	0.15	5	695
5.00	KBH120421P00005000	0.29	0.00	0.25	0.26	2	720
6.00	KBH120421P00006000	0.54	0.00	0.45	0.47	1	737
7.00	KBH120421P00007000	0.75	0.00	0.75	0.78	83	6,914
8.00	KBH120421P00008000	1.25	0.11	1.18	1.22	2	227
9.00	KBH120421P00009000	1.77	0.05	1.74	1.78	4	24
10.00	KBH120421P00010000	2.62	0.00	2.42	2.47	3	36

Will you pay 1.25 for 8.00 put option or 1.77 for 9.00 put option?  I guess 1.25 for 8.00

I see that for 8.00 option, you will gain 10% for every $0.20~$0.30 drop at stock price. Correct me if I am wrong. 

If so, you are betting 50% gain which is to sell it at 1.9.  That means KBH will drop to low 7.xx. in two/three months, right?

I am worried about the upside.  From the TA, this stock could test $9 ~$9.5 level in next 30 days with support at $7.5~$8.  Looks like very risky to shoot for 50% gain.   I can see between 30% gain and 30% loss in this trade if you try to unload it in two months.

 

所有跟帖： 

• 回複：Follow up question: -392- ♂ (436 bytes) () 12/06/2011 postreply 21:44:08

• TA is just a reference -planotx- ♂ (200 bytes) () 12/06/2011 postreply 21:51:09