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Technology Stocks : Altaba Inc. (formerly Yahoo)
AABA 19.630.0%Nov 6 4:00 PM EST
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To: Rational who wrote (5195)12/29/1997 8:58:00 PM
From: Oeconomicus  Read Replies (1) of 27307
 
the call writers (brokers) are promoting April 40 calls at a discount of $6.

Sankar, near-the-money options generally have much higher time value than deep-in-the-money options, so I wouldn't really consider it a discount (not without checking the theoretical values that is).

Also, the deep-in-the-money calls provide a better hedge for a long position where you are trying to lock in but defer realization of a gain and would be the preferred vehicle for that purpose. On the other hand, near-the-money or out-of-the-money calls would be the better choice if you are generally bullish on the stock and want to keep it beyond the option expiry, but want a little protection and to soak up some time premium to boost income.

Bob
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