I’m used to warrants and would like to know what’s the difference between options and warrants (if there’s one other than the fact that warrants are europeans…)

Wikipedia’s warrants page compares them to options.

I think: warrants: privately issued, long term, dilutive of stock; options: exchange traded, short term, non dilutive.

AAPL options are US style; meaning they can be exercised at any time.

Re: large volumes of 120 PUTS

[quote author=“Robinson”]After following this forum for almost a year I registered today because I noted in the option chain something that scared me : large volumes of $120 PUTS in April-08 and Jan-09. I wonder if somebody is up to something.

Just afraid to lose all their money in a volatile stock,  so sacrificing 10% of the last 6 months gain to protect all prior gains.

[quote author=“sleepygeek”]Wikipedia’s warrants page compares them to options.

I think: warrants: privately issued, long term, dilutive of stock; options: exchange traded, short term, non dilutive.

AAPL options are US style; meaning they can be exercised at any time.

I didn’t think of Wikipedia! Thanks.

But their definition is not totally accurate: the warrants I use are short term like options!
I’d like to hear from somebody who used the two…

What I specially dislike is that they trade till 11:30!!! And we miss the best hours! And the day after they have the tricks to sell them MUCH HIGHER than they should be!

For an example this morning they were the same price as yesterday morning!

To my mind the key difference between options and warrants is the issuer.  Warrants are usually issued by the company or by a related party and often as part of another transaction where the warrants act as consideration for some undertaking.

Options are noramlly issued by an exchange, such as CBOE.

Either can be short or long term; either can be publicly traded.  Options are generally much more actively traded and generally come in a large variety of strikes and expirations.

Can anyone explain why the stock moved up over 1% yet DEC200 calls dropped 15% today?
I’m relatively new to options, but I’ve never seen such a divergent move.

Even my 2010 Leaps were down on this upward stock move.

tia, jim

[quote author=“jimlongo”]Can anyone explain why the stock moved up over 1% yet DEC200 calls dropped 15% today?
I’m relatively new to options, but I’ve never seen such a divergent move.

Even my 2010 Leaps were down on this upward stock move.

tia, jim

IV declines.  mtdoc warns about this a couple of days ago.  Also theta (time decay) ... declines accelerate when less than 30 days.

[quote author=“roontoon”][quote author=“mtdoc”]
More later…

Thanks and take your time… YOU ROCK!. I am learning from every source I can but when you and others here that are really trading explain what you are doing it carries a lot more weight for a newbie. Practical examples are the best way for me to learn and as it seems other sources (books, internet) give you the text book example but are lacking in the hows and whys. I will look forward to your post!!

d

Just realized I never got to this. It will have to wait a bit.  It’s been a crazy week. Just got power back at my house late Friday night after 4 1/2 days without.

Will be looking to unwind long Dec calls and puts this week. Plan to end up short some Dec OTM calls and puts held against long Jan options. Unless there’s another big drop IV should drop precipitously this week (this started on Friday)- December IV should drop more than January since the Macworld effect should put a floor under Jan IV.

My best guess is a range bound market for the next month - for AAPL and the indices but I’ll be but hedged against big moves either way.

Will try to post a coherent summary of my general option strategy - how I use the greeks and different spreads sometime soon.

Happy trading.

[quote author=“mtdoc”]
Will try to post a coherent summary of my general option strategy - how I use the greeks and different spreads sometime soon.

Thanks… No rush take your time.

d

So it appears the July 08s are coming up.

[quote author=“jimlongo”]Can anyone explain why the stock moved up over 1% yet DEC200 calls dropped 15% today?
I’m relatively new to options, but I’ve never seen such a divergent move.

Even my 2010 Leaps were down on this upward stock move.

tia, jim

Far OTM (out of the money) calls may start to drop considerably; as Mace pointed out, time decay starts to devalue them, but also in this volatile market, investors are beginning to realize that the stock may very well not reach 200 by OE (options expiry) on 12/20.  In my opinion, especially in this whipsaw market, it is a superior option to be limited to ITM (in the money) calls for the current month.  My December calls are mostly 160’s, with a handful of 170’s which I will most likely dump at the next nice bump, possibly converting them into fewer 160’s or 155’s.  At least the ITM or NTM calls should retain their value better.  Doesn’t mean you won’t lose money in a disastrous market, but at least your calls won’t die value-less, as could easily happen with Dec200’s.

Hope that helps!

AAPL’s up $5.. the Dec $200s are now down. Grim.

I moved all my DEC calls to APR or further yesterday.

Agree  

Yesterday was make or break for me and it broke. Got out of all my Dec calls as quick as I could this am. Took a pretty good hit on $210s (trying to be cheap - that’ll teach me…), but not too bad on some $190s.

I just didn’t see them recovering with the time decay kicking in and the market being so shaky right now. Gonna hold my Jan 185s though.

[quote author=“jimlongo”]I moved all my DEC calls to APR or further yesterday.

Personally I think the Decembers will go crazy after the weekend when people see the masses fighting to get into Apple Stores, and also remember that OE for December is a long way away - the 21st - and the dramatic drop in the premiums is way overdone IMO. They’re baking in a consumer collapse causing the market to slump going into Christmas and I just don’t see that happening in any way shape or form.

I still think AAPL can run up to $200 in short order this year, if the markets can put in a bottom and recover. The stock is disgustingly oversold and cheap here.

By the way, don’t forget its iPhone launch weekend in France next Thursday

Just sold a APVAN I bought Fri for 13.00. Im liking this buyin low selling higher thing seems to suit me much better.

Im trading at the airport so I have to keep my eyes peeled.

Im sure we will see higher highs but I gotta board my flight in a few minutes and Im going to start booking smaller gains as I get them and try to stay disciplined.