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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

+0.8%

Nov 14 9:30 AM EST

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To: Uncle Frank who wrote (64378)	8/7/2003 10:44:26 AM
From: rkral	Read Replies (1) of 77399

OT .. Frank, re "[Time-value accrues to the seller] implies that the seller always starts out ahead. He receives a premium for entering into the transaction, while the buyer has to pay a premium." Agreed, but I think it means more than that. Not only does the seller "start out ahead", I think the statistical expectation is ... the option writer ends up ahead .. with the time-value portion of the premium, and the option buyer will lose the time-value. Any single option trade, or course, can be significantly different from the expectation. Regards, Ron P.S. Significantly edited after the initial post.

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