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Biotech / Medical : PFE (Pfizer) How high will it go?
PFE 25.72+2.2%9:57 AM EST

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To: Caroline who wrote (2541)5/18/1998 2:32:00 AM
From: ratan lal  Read Replies (2) of 9523
 
Caroline

Can't you be obliged both to sell and to buy between now and December?

Yes. But NO ONE would do it. You lose all the premium. Its better to just sell the Calls or the puts than to exercise.

Think about it. If PFE runs to 145, the 110 call will be at least 35 plus a small premium even if it is $2. Its better to sell the call at 37 than to exercise at 110 (pay commissions), sell PFE at 145 (pay more commissions) and lose the $2 premium.

And if it does get called. So what. Thats the risk (loss of extra profit) you take when you do options.

ratan
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