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Technology Stocks : NCDI - Network Computing Devices

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To: Lincoln Landis who wrote (4166)	6/7/1999 3:48:00 PM
From: Jim Henke	Read Replies (2) of 4453

Ok, Lincoln. Here's another lesson on options. Suppose NCD gives a good presentation and Paine Webber issues a buy recommendation. Let's say NCDI moves to $6...for a day. Right now, you can buy a June $5 call on NCDI for twenty-five cents. But you have to buy them in groups of 100, called a contract. And they expire the third Friday in June. That would be June 18. If NCDI rallies to $6 on or before then, then each option has an intrinsic value of $1. A 300% gain. Don't be surprised if NCDI makes a big move on June 18. And don't be surprised if I buy June calls on June 17 for $1/8. Wow. Just checked. Open interest on those calls is 1583 contracts. That's a pretty big number.

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