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Technology Stocks : Silicon Valley Group

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To: Juniper who wrote (1213)	10/26/1997 4:15:00 PM
From: LLCF	Read Replies (1) of 2946

<I bought more stock this morning, reasoning that it was getting beaten down by association rather than deservedly> Great point...and down as much or more than the group for a stock that has far more upside (and risk). There are march options but they arent LEAPS...no long terms in SVGI. Options have been "reasonable" but I was out Thur & Fri (what days to be out!) and heard there were big "put" buyers which could cause premium to increase dramatically. Options are priced based on their "iplied volatility" versus the "actual volatility" of the stock...if the implied is higher than the expected actual....they are overvalued. An example was Cymer where the implied volatility got over 100 due to call and put buyers overwhelming those willing to sell the premium. You can get a pricing model (the Black Scholes option model... of recent Nobel award fame) at CBOE.com I believe... I would never buy options without pricing them first...this is how my firm makes all its $....public rushing in to buy "FAT" options. DAK

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