Hey, DD.
I really appreciate your trying to explain call options. I'm trying to figure out how these can work for me. Math has never been my strength (I'm an art guy). I'll write out what my goal is here and what
i see as problematic in buying April calls. I do realize that you've already done more than enough to try to help though, so feel free to tell me to buzz off.
I want to accumulate at this point. Consider me a firm believer in the technology.
Here's how I see it: If I buy April20 calls at 1.90 that's $190 for 1 call or 100 shares, right? Then say the stock reaches $20.00-$25.00 and I decide I want to exercise and keep the shares (it's still early in the game and I want to accumulate). That's $2,000 to exercise and buy the shares for each call, right? So, if I bought 5 call (for example), in order to extract the shares from those 5 calls, I'd need $10,000 in cash. I just don't have that much cash available. Are you saying I should by 20 or more calls and then sell back all of them (when the price goes up) except for the five I want to exercise to help pay for those 5?
I feel like I'm missing something important but can't quite put my finger on it. Maybe it's my lack of cash to complete the transactions that's the problem? I think I'm going to have to head off to the library an pick up "Investing for Dummies". We always used to joke about the bookshelf at my Aunt and Uncles house. They must have had a dozen of those yellow books all lined up...guess it runs in the family!
