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aclark20

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aclark20

Re: bobbytx1 post# 11606

Tuesday, 08/26/2008 5:31:44 PM

Tuesday, August 26, 2008 5:31:44 PM

Post# of 34115
Just like you do stocks, buy low sell high. I was watching the $33 strike put for DUG, trading at 1.60. If DUG went down to $32 tomorrow, it would be worth 2.50 or so.

Call's follow the stocks movement, but exaggerated, and the price decay's with time approaching the expiration date.

Puts follow the inverse of the stock movement, and also decay like calls.

http://www.investopedia.com/university/options/ << good reading to learn more.
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