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Technology Stocks : JDS Uniphase (JDSU)
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To: wopr1 who wrote (11291)7/11/2000 11:37:13 PM
From: SJS  Read Replies (1) of 24042
 
VOLS are risk. When stocks gyrate wildly each day (IOW, the range of the stock is consistently wide each day around a mean price), that volatility translates to option prices that are higher than those stocks that don't move wildly.

The option price is determined from a number of things, and volatility is the most important of those determinants.

If you have two stocks both at 115 today and the strike price is 150, for Nov expiration, the stock with the highest volatility will command the largest cost to buy, or the most income to sell.

Hope this helps a little. My take away from this is that they expect JDSU to be less volatile and more range bound during the forseeable future. Less volatility means less premium in the options.

Steve
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