SI
SI
discoversearch

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 : Dell Technologies Inc.
DELL 138.940.0%3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: PAL who wrote (137092)7/20/1999 7:26:00 AM
From: GVTucker  Read Replies (3) of 176387
 
PAL, RE: DELL and options

Since when an equity option is a European style option?

These are over the counter options, not the exchange traded variety that you are probably familiar with. DELL sets the structure and terms of the options, including the method of exercise (American or European). The trade is executed with another institution that needs or wants a long position in puts, and likes the idea of being able to buy them cheaper than they would have otherwise done on an exchange, even though that institution gives up the right inherent in an American call.

This also goes to your next question:

Since when does a seller of a put option have the option of net-share settlement ? The only option a seller of a put has is to buy it back to close the position.

Once again, the terms were all set by DELL, so if that's the way they wanted it, that's the way they got it.

Note that this is not a special deal for DELL. Most institutions that deal in high volumes of options will tend to use over the counter options so that the contracts can have a custom structure. And the investment bank that creates these contracts is more than happy to comply, because an OTC option will give them a little extra fee income.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News