USRX Message Board - Msg: 1089232

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Technology Stocks : USRX

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To: Glenn D. Rudolph who wrote (17234)	3/29/1997 4:55:00 PM
From: Janice Shell	of 18024

Glenn-- An interesting question, isn't it? You would think that increased liquidity (as represented by rising OI) would result in reduced premiums. Except that recent experience indicates that it doesn't: look at the MSH--on the money calls asking 2 1/4 the the morning of expiry (Thursday a week ago). The OEX is no different. It seems that in reality increased liquidity diminishes premium erosion. And it ought to be the other way round. Just talking off the top of my head, though. But is there some Important Truth in all this, something that would help us do better? Naaahhh....probably not. (Psssstt: we gotta think up some more OI jokes to keep 'em interested, HAHAHAHAHA! Pun, get it???} Janice

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