Understanding the potential profitability of an options trade is essential for any investor. One way to assess this is by calculating the "percent to double" value. This figure indicates the amount the underlying stock must move for the option to double in value. Typically, we look for a 7%-10% value, but sometimes we are willing to accept less. This calculation is a proprietary one used by Smith Barney and can provide valuable insight into how long we may hold an option. While it does not dictate our decision to buy an option, it is a useful tool in our assessment.
