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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.94

+1.1%

Nov 28 9:30 AM EST

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To: Thomas Scharf who wrote (14783)	6/26/1998 5:17:00 PM
From: The ChrisMeister	Read Replies (1) of 77400

Thomas, can you explain how you arrive at a 1% cost to an in-the-money put option strategy? In a post (https://www.siliconinvestor.com/readmsg.aspx?msgid=4990111) a couple of days ago I briefly entertained such a thing. Here's why I ask: Today's closing ask on the July 95 puts was 5 7/8 (which actually seems cheap in terms of time value). If the stock climbs a little more, to say 93, by the time July 18 rolls around -- which is not outside the realm of possibility -- those options go out at $2, for a 3 7/8 loss. This is a 4+% loss on today's stock close of 89 7/8. Of course it could be much better or worse depending... What am I missing, besides the fact that the future is of necessity uncertain? ChrisMeister

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