Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 175.25

+0.6%

3:59 PM EST

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To: Jon Koplik who wrote (45946)	10/24/1999 11:48:00 AM
From: Tavros	Read Replies (2) of 152472

Jon, Your put/call parity exposition is useful, but not enough to prove that deep-in the money puts will be exercised. If you look at the deep-in-the-money quotes for puts (and calls), for most stocks are almost a point. And the deep-in the money puts typically will be quoted close to their intrisic value (for the reason you pointed out), but I would submit that most such puts go unexercised unless you have sharp moves in the underlying which create violations of the put/call parity and such violations exceed at least 1//2 of the quoted bid/offer spread, at which point, typically, the market maker will exercise you (dividends also come in). I have written tons of puts (as part of turbo-charged bullish strategies, involving also buying calls) over the past 7 years, and I have been exercised only in about 10/15% of them. My 5 (in-the-money) cents Tavros

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