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 : Qualcomm Incorporated (QCOM)
QCOM 176.35+1.2%10:21 AM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Jean M. Gauthier who wrote (45853)10/24/1999 12:34:00 AM
From: Jon Koplik  Read Replies (2) of 152472
 
Jean - just to complicate things further -- here is an old post on early exercise of puts.

************************************

Subject: Qualcomm - Coming Into Buy Range
To: Labrador
From: Jon Koplik
Apr 5 1999 11:34AM EST
Reply #26093 of 30823

Mathematics of early put option exercises. (Warning -- this is stuff I
learned in business school, but -- it DOES actually apply to the "real
world.")

Put = Call - StockPrice + PV(ExercisePrice)

Call = Put + StockPrice - PV(ExercisePrice)

(PV means present value or ... e ^ (-rT), in case you want to be
reminded how glad you are NOT to be in school right now)

If you work out an example of a deep in the money put, the above
calculation will yield a put value that is below the value that can be
realized immediately if one exercises the put option as soon as possible.

Moral of the story - ALL deep in the money (American, NOT European
style)** put options will be exercised early, unless you are lucky enough
to have a moron on the other side of your transaction.

** American options can be exercised any time during the life of the
option.

European options can ONLY be exercised on the last day of the life of
the option.

Jon.
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