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Technology Stocks : General Magic

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To: Jerry Miller who wrote (2321)	6/17/1998 5:27:00 PM
From: Mark Oliver	Read Replies (1) of 10081

<...and if we assume that the AMEX comes correct, and offers these options as well, wouldn't these exchanges need to own the stock.> No, it doesn't really work that way. The whole issue of options involve contracts to buy or sell at a price. Just like NASDAQ, the options market makers are just brokers who stand between the buyer and seller. They are doing lots of tricks to create positions when there is no buyer to match a seller or vice versa. It's too complicated to explain, but the main thing is the added exposure to options mean the GMGC has graduated to another level as a stock. Sometimes options create an extra force to push the share price around for both good and bad. You can use options to protect yourself through the purchase of puts and you can get extra income when you sell calls. You can also leverage your money buying contracts, but that involves more risk as it has a limited time position vs a share purchase which lasts as long as the company trades. Regards, Mark

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