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Strategies & Market Trends : Tech Stock Options

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To: Patrick Slevin who wrote (40159)4/17/1998 10:23:00 AM
From: ViperChick Secret Agent 006.9  Read Replies (1) of 58727
 
I saw an interesting post .......anyone got an idea on the answer for this

I know it has to do with the style of the option and how they value it ..but not specifics...

To: +carl hittle (16719 )
From: +R. D. Buschman
Friday, Apr 17 1998 10:13AM ET
Reply # of 16733

OK, you option gurus, answer this. Why would anyone be willing to pay me a full point
at the close yesterday for my SPX April 1100 puts? It would have to open gap down 9
1/2 points or so to be worth owning and if one expected that, why not just buy May
puts instead? If someone was closing a short put position for fear of a gap down
opening, why wait 'til the close and still pay a full point? Seems to me we had a much
better chance of clearing 1100 during the day yesterday than at the open today. I'm not
complaining about salvaging a point - just wondering what am I missing. Anyone?
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