Altaba Inc. (formerly Yahoo) Message Board

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Technology Stocks : Altaba Inc. (formerly Yahoo)

AABA 19.63

0.0%

Nov 6 4:00 PM EST

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To: IKM who wrote (5145)	12/29/1997 6:35:00 PM
From: Rational	Read Replies (5) of 27307

IKM: I noticed that April 60 Calls traded for $15, and April 40 Calls for $29. There is a difference of (60+15)-(40+29) = $6. If at all, April 60 calls should be cheaper because a price of $60 for YHOO is less likely than a price of $40; everything else is inherently the same for both contracts because it is the same underlying stock. Further, near-the-money calls should generally be active. For YHOO, the call writers (brokers) are promoting April 40 calls at a discount of $6. The call volume is very large for these calls. It is ominous in my opinion because the brokers must be thinking that before April the price may (or that they can make it to) drop to $40, keeping the April 40 calls actively traded until April when they make a windfall profit. By having most options contracts trade with the same strike price, the brokers can easily manipulate the stock price around the strike. Sankar

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