Alcatel (ALA) and France Message Board

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Technology Stocks : Alcatel (ALA) and France

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To: bertrand bidaud who wrote (167)	11/2/1998 8:47:00 AM
From: Steve Becker	Read Replies (1) of 3891

I had DIGI options converted to YDI. I got details faxed from my broker firm's clearing house because none of the brokers knew how to interpret the contract adjustment. The new contract is “81 ALA shares and cash in lieu of .5 ALA shares. The underlying price of YDI, YLI and YZS is as follows: YDI = .81(ALA) + cash in lieu of .5 ALA shares, rounded to the nearest sixteenth. For example, if ALA closes at 40 (this was obviously written before September 17th), and the cash in lieu amount is $20, the YDI price would be: YDI = .81(40) + .20 = 32.60 = 32 5/8 rounded. In this example a YDI 30 Call would be $262.50 in the money (difference of deliverable value of $3262.50 and the strike price amount of 30 x 100 = $3000). A premium of 2 5/8 would yield this amount: 2 5/8 x 100 = $262.50.” I understood it after the fourth time I read it. The $20 comes from $40 x .5 Steve

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