Now Mike, here's something I want you to explain to me.
The Dow Jones LEAP put, strike price 140, for December of 2002 sold today for 25. The DJIA ended at under 10,600. The LEAP put, then, cost LESS than the current value, being priced as if the Dow were at 11,500 [140 less 25, or 14,000 less 2,500].
It's European style option that cannot be exercised until expiration.
But it looks to me as if what we have here is INVERSE premium. I guess someone is figuring the present cash value is less than the future cash value.
Now am I nuts or have I discovered El Dorado? |
