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Strategies & Market Trends : Options

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To: Ritch who wrote (6286)4/11/2000 1:03:00 PM
From: AmericanVoter  Read Replies (2) of 8096
 
well, the way I thought it works, is that if somebody paid 89/share as insurance to sell his / her shares at 170... then in effect, that person is insuring that he / she will get at least 81/share (effective cost)... now, at expiration, if the price of the underlying is say 83, why would that person exercise the puts when he/she can sell the shares in the open market for 83...? obviously that is not how it works... I am just trying to learn...

best regards
amein
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