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To: MonsieurGonzo who wrote (9009)	2/22/2001 11:33:35 AM
From: Jurgen Trautmann	Read Replies (1) of 11051

Steve > option ar(i??? Barron's is stammering?)bitrageurs Yeah, didn't hear from that so far. That proves that price-differences must be bigger than spreads frequently!!! BTW, if the spread is as big as the premium, you have a option "European Type". Guess, US-options are on the way. You didn't comment my observation about "hanging" call-prices - in the meantime I observed this in so many cases that I'm absolutely sure: options-formulas still may be used but just as "skeleton" - in reality prices are defined free, not only reacting on shorttime market-environments but also - right now - representing the common feeling that a rescue will not happen during this and next quarter. If we will come out off this valley yet this year (???) it would be a good idea for me holding my "US-type" leaps - it's the only way out off their "hanging" price-characteristics: at expiration the inner value is the only thing that counts - at least if the underlying cannot be "arranged": Do you remember? We saw here (guess years ago) calculations about optimizing gains for covered-call-writers at expiration-days. Say each csco-leap has a OI of more than 20000 - today - that represents covering stock-numbers in a 3-digit-million-region. Enough for moving a stock if effectively used? How many shares do you need for moving csco when volumes of 50 millions are traded a day? Institutional investors don't love risk. At the other hand they have the news, they have the "recommendations" and they have the brokers - risk is limited. If it works, they win twice: their calls expire worthless and they can enter again after expiration and buy stocks back at attractive prices. However, if many call-holders sell soon when the underlying begins suffering the optimal price-target moves down - risk increases. Do you have information about the percentage of calls (esp. leaps) written by institutional investors? Jury PS: Zat have get wrote by German-Englisch. I am learn ziz in mine freetime. Please love not about zat. Two schittalking Krauts can have a brave hart, hard had and a well charakter.

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