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Strategies & Market Trends : Swing Trading With Options
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To: underdog430 who wrote (23)7/30/2001 3:23:10 PM
From: Dan Duchardt   of 88
 
Mark,

I took a quick look at AVIR once this morning at around 27.50 I think. I plugged the prices into the model and it calculated the volatility for the strike 40 puts and calls at just about 100% (plus or minus a handful). The source that gave the volatility at 179 when the stock halted was reporting the new value at 120, but that is an average over many strikes. In any case, there sure was not much time premium left in either the puts or calls when I looked.

As for getting out of a position, if you are not talking about huge size you should always be able to get the price being quoted. Unfortunately, the rules about firm pricing in options are pretty weak (should be changing not too far down the road) so there is always risk of them backing away from a quote. But the wide spreads reflect the lack of liquidity and you should be able to get the published price in most cases.

Dan
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