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Technology Stocks : All About Sun Microsystems
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To: Bald Eagle who wrote (9188)4/18/1998 9:48:00 PM
From: Ben Antanaitis  Read Replies (2) of 64865
 
Wiseowl,

I've heard of the threshold as low as $.50. I think it depends on your broker's rules. The CBOE site has the 'official' definitions and rules of option trading. And they say that a call holder can lose money, if the calls he holds finish 'in-the-money'.. the transaction costs of auto-exercise can eat up the 'profit' and, in fact, cause the option holder to lose money overall. That's one of the dangers of holding calls to expiry.

Max-Pain is, however, a second order effect, so news, Greenspan, or earnings reports can override the 'gravity well'.

There's always next month.. :-)

Ben A.
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