COMS & the Ghost of USRX w/ other STUFF Message Board

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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF

COMS 0.00150

-28.6%

Dec 11 9:30 AM EST

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To: freeus who wrote (7032)	10/19/1997 11:24:00 AM
From: Glenn D. Rudolph	of 22053

Glenn: Please explain: how does all option premiums being retained by their owners slant the situation to help the market maker? Freeus, The option writer has the premiums. Most small invesors buy options such as calls and puts. The brokerage house is the writer of the option. Thus, if the maket closes due to collars, etc. all expiring options become worthless and the option writer keeps the premium even though the holder's option is in the money. The rules are on the CBOE home sight. I suspect the brokerage houses had a great deal of input in getting this rule written this way. I typically am an option writer so would benefit too, but it does seem very unfair to those that own in the money calls for example. They become worthless and the call writer keeps the premium. Did I make sense? Glenn

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