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Technology Stocks : 3DFX
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To: Sun Tzu who wrote (10131)1/15/1999 1:23:00 PM
From: Piranha  Read Replies (3) of 16960
 
Okay, the share amount part sounds logical, but what about the strike price? Let's look at a real-world example. Lets say I own one of the 13 open August 5 call contracts, giving me the right to buy 100 shares of STBI anytime before August 21. Once the merger completes, I can understand it would become good to purchase 65 shares of TDFX, but at what price?

$5.00? (No change in strike price)
$7.69? (One share of STBI@5 * (1/0.65))
$7.50? (The closest strike price on current TDFX options)

Piranha
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