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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1203  
Subject: Re: Option Trading Date: 12/3/2012 6:19 PM
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Zumba,

You wrote, if you exercise the option you will lose the profit. Sell the call, pocket the money, then apply that money towards the purchase of the stock.

Basically, it almost never makes sense to exercise early because you leave a lot of time value on the table.


So you think the time-value of an option always trumps fundamental value? That seems very naive.

It might be true on average; but I doubt it works every time. Do you even have any data showing this is true on average?

BTW, I studied options years ago; but I've not found them very useful, given my investment strategy so I have little practical experience with them. But before I would take any advice like that, I'd want to at least see some statics to back up the claim. So do you know of any?

- Joel
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