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Technology Stocks : Micron Only Forum

MU 344.97

+5.5%

Jan 9 9:30 AM EST

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To: Knighty Tin who wrote (33520)	5/17/1998 10:44:00 PM
From: DavidG	Read Replies (2) of 53903

Mike, Thanks for the response. I have been trying to review the charts on some of these PUTs we are discussing and it gets more confusing as I dig deeper into it and makes me realize how little I understand about their function. I am glad you mentioned degradation in premium as it approaches in-the-money value b/c this is where it gets very difficult to follow...and where I lose trust in the specialists setting the price. More times than not I am forced to deal with the expansion and contraction of the pure premium toward the intrinsic value...which behaves in a non-linear function and one can not help but become highly suspect of the CBOE for not giving the true value. As an example, in the last hour I was looking to get some calls to go with the short position I had in MU and the MUGFs were sticking to the 1 3/4 price. Finally they gave in to me at 1 1/2 which I felt it was worth...but only after I cancelled my order and they had 15 minutes of pending to make a decision...which BTW is a lot of time when a stock is moving. This is why I have a difficult time trading these PUTs on MU... and we haven't scratched the surface with the problems of the large spread and low volume which are also significant disadvantages to the trader in the short term. As far as out-of-money PUTS/CALLs I tend to agree with you that there is a place, but I am still collecting the data on time/value for options at different strike prices. I was wondering if you knew a few sites that can give some strategy to these PUTs and possibly some trading programs to determine option value to stock price that could be used for trading? Quite frankly I have not had the best performance in options vs the performance of the long/short positions b/c of the disadvantages described above. TIA DavidG

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