Okay, I had a question about timing an options call buy - I heard rumors that BAE is sizing-up L3 Communications for acquisitions and am wondering if I should buy now, or wait until they announce their intentions. Would LLL stock price fall if there's no deal? How will the options price track this?

This forum focuses more on Indian markets and thus it may not be the best place to ask about stocks listed in US/EU markets....

I searched on the internet, but couldn't find any news related to BAE's interest in L-3.

I am not sure how reliable these "rumours" are.

If you want to benefit from any such development, you will have to take a position before the announcement.

Usually, when such news is made public, the market immediately adjusts the stock price to reflect the consequences of the development.

Taking a position after the announcement won't bring much gains.

As the saying goes "Buy on rumours and Sell on news".

===========================

I looked at charts of L-3 at Google Finance. The stock seems pretty stable.

As the stock hasn't moved much in the recent days, even if there is no such deal, the stock price should remain unaffected.

Different options behave differently. It depends a lot on how far the expiry is and how close the strike price is to the current price.

You need to understand about "Delta" for options.

Delta for In-The-Money options is maximum.

Delta for options closest to expiry is maximum.

If you have further doubts let me know.

__________________
Read All Rules Before Making Any Post | E-Investing on Google+