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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Jean M. Gauthier who wrote (5270)8/24/1999 10:58:00 AM
From: LLCF   of 54805
 
<Can you explain a little better why I am committing an unpardonnable sin <smile>>

yes, when you exercise an option you get parity [stock p- strike p], a call [with no dividend] is always worth more than parity! So you want to sell it instead of exercise it.

that said, near expiration calls can trade below parity if you sell, 'em, so you may want to exercise and sell the stock if the MM's suck with way < 1 week less. You have to be the judge as to what time value is left. If you're going to keep the stock anyway, never exercise till expiration day.

DAK
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