Options for Newbies -(Help Me Obi-Wan-Kenobe) Message Board

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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe)

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To: LTK007 who wrote (830)	5/12/1998 9:36:00 AM
From: William G. Murray	Read Replies (1) of 2241

Max90, Each contract is based on 100 shares. Therefore, 100 contracts at 1/16 will cost you .0625 X 100 (shares per contract) X 100 contracts + commission, or $625 + commission. If the stock closes Friday at $65.500, your May 65 calls are worth 50 cents each. That is $65.500 (stock price) - $65 (option strike price) equals 50 cents each. Your 100 contracts are worth $5000 less commissions. On expiration Friday, any close on the stock at or below $65 makes your calls worthless. The miniscule 1/16 current value on the options is time premium. Hope this is of some help. B.M.

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