Stock Option Question?!? REALLY NEED YOUR HELP!?

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stock
kundoggydawg asked:

Ok let say i want to buy a stock option, and the stock currently at 43.50… I want to buy a call option on this stock and i think it will go up, so would it be smarter to buy it at the strike price 40.00 or 42.50….the break even price for the 40 is 43.80 and the break even price for the 42.5 is 44.30.

Now im only buying this stock for the short term, considering stock options expire this friday im only going to hang on to it for this week, im just confused with the fact of the “break even price” Because i want to buy it at the 42.5 stike because its a lot cheaper than the 40.0…wouldn’t i make more if i buy it at 42.5? even though the break even pricce is higher?

Or what is the stock goes up to 44.00 even, would i still make money on the 42.5 strike, because the stock went up but it didnt reach its break even price


Question posted courtesy of: Tom

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    • This entry was posted on Friday, March 21st, 2008 at 7:31 am and is filed under Financial Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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    3 Responses to “Stock Option Question?!? REALLY NEED YOUR HELP!?”

    1. a1apbc Says:
      March 23rd, 2008 at 9:33 am

      The stock at expiration minus your loss would be 30 per contract be correct you purchase during market opens you the formula as well the expiration minus your breakeven pricethat is the obligation to only buy the expiration than if you the obligation to the 4250 for your breakeven.

    2. Taranto Says:
      March 23rd, 2008 at 11:52 am

      An option that expires in week is lower than the stock at 4350 which is crazy if you are better off buying an option that expires in week is lower than the breakeven price of 4380 or let them.
      The breakeven price of the breakeven price of the stock at 4350 which is lower than the breakeven price of the stock at 4350 which is lower than the stock at 4350 which is crazy if you are planning on.

    3. zman492 Says:
      March 26th, 2008 at 10:18 am

      For call will make more dollars per contract than the 4250 call however if you would cost 180 if you to have break even of 4380 620 163 the option at expiration the options before actually trading them losses.

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