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To: Knighty Tin who wrote (32062)	9/2/1998 12:52:00 AM
From: PaperChase	Read Replies (1) of 132070

MB. Which Bank index are you buying puts on? Also, I have some puts in the telecom area mostly to insure my long positions. I am trying to understand the premiums on Put contracts during extreme market volatility. I have noticed that on one of my NOV 25 Puts, the pure time/volatility value is indicated at $2 1/2 when the stock is trading out of the money at $25.50. However, when the put went into the money (the next day) when the stock droped to $22.25, the put was priced at only $4 1/4 ! In my mind it should have been priced at $5 1/4 ($2 1/2 Time/Volatility value + $2.75 intrinsic value). So it appears that somebody is swiping a $1/share in the time value when the put goes in the money. Any thoughts? Is this just another one of my bizarre discoveries?

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