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Originally Posted by RedStripe
Dec '07??? wow, that's a long time... actually they are technically called leaps. You must have paid a good premium for that length of time. Anyways, I'm not one to give investment advice, but I would cash out of those puts before the end of the summer if I was the one who had them.
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I use a real simple formula to determine if the puts were cheap. When I bought the puts I paid 8.40 for the dec 135's. The spiders were trading about 131. That's four points "in the money". Which means, they had a time vale of 4.40(8.40-4) each. 4 bucks for 19 months? That sounded cheap to me, so I bought them.