AOL Options for the Bearish Message Board

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Technology Stocks : AOL Options for the Bearish

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To: The Duke who wrote (15)	3/2/1998 5:19:00 PM
From: yard_man	Read Replies (1) of 33

>>someone posted that puts are now more expensive than calls,<< This is not nonsense. Usually (->go back and read McMillan<-) puts carry more time premium. Its a fact. The ratio however is dynamic. When calls become priced so that there is more of an "equality" between premiums on calls and puts, it is usually a short term bearish indicator. Get in the habit of reading the options focus news items on Yahoo and you will see this mentioned -- it was mentioned last Friday. In a perfect world, arbitrage would make certain synthetic positions, e.g. short with a call vs. put, equivalent but sometimes there are advantages to one position or the other. Agreed you would have to be sophisticated to pick up on them, but overall market trends, i.e. are reported on.

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