CMGI What is the latest news on this stock? Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : CMGI What is the latest news on this stock?

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: DAX KIMPO who wrote (16819)	2/28/2000 1:35:00 AM
From: nihil	of 19700

Did the open interest in calls go up, indicating that market makers sold more calls (and may have hedged them)? The change in relative prices between calls and the underlying occurs all the time, and does not require any changes in the open interest in options or in outstanding stock. All that is necessary for a call price to rise and the underlying to fall is a shift in someone's expectations or time preferences. When I expect the market price of a stock at option expiration to be above the current option price (plus strike) I buy the call (from "someone who disagrees" with my guess). Fully invested and at the margin, I will have to sell some of the underlying to finance my purchase (I wouldn't sell anything else because ex hypothesis it is only this stock (arguendo CMGI) for whom my expectations or preferences have changed. Of course, I have a day to finance the purchase of my call -- so there is some leeway or wiggle room. The temporary creation or destruction of money through the transaction loan and margin loan process allows prices to accommodate or diverge from those implied by the strict accounting of the quantity theory of money. Interesting observation, though.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next