AOL Options for the Bearish Message Board

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Technology Stocks : AOL Options for the Bearish

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To: yard_man who wrote (2)	3/1/1998 6:47:00 PM
From: James F. Hopkins	Read Replies (2) of 33

AOL . Premiums ..puts vs call and shortsell This tread being for bears on AOL. Over time and having traded a lot of AOL options I have noticed the following. -------------------- The premium on puts is generally higher than on calls if you calculate the intrinsic value. In times past buying calls and shorting the stock would be a cheaper way to go, BUT right now that is not so. ------------------- It's because the majority of people buying options are bullish on AOL as are the ones writing options. -------------------- None the less at this time "both" puts and call premiums are priced very high about 25% to 30% more than last year. This must be because of more demand on both sides than last year. It can't be volatility as she has not been as volatil percentage wise as she was last year. -------------------- There are just to many players in the AOL game buying options compared to the people willing to write options, more people wanting leverage are attracted to this stock. And there are just better shorts out there with less premium. --------------- Jim

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