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Technology Stocks : Micron Only Forum
MU 263.78+4.5%3:59 PM EST
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To: John Graybill who wrote (42684)2/3/1999 4:33:00 AM
From: Land_Lubber  Read Replies (1) of 53903
 
Thanks for the info.

> Some are quantifiable using a ridiculously complicated equation (Black-Sholes)

I have used a simplified version of this equation in my Mathematica option pricing model. I use it for "testing" the potential results of various spreads and combinations. Despite having shown how I could limit my risk in various ways, so far I have always decided to go with straight puts or calls for maximum return, and damn the torpedoes. :)

> they're basing the option price on that bogus 72 5/8 being the closing price

The bid/ask on the option did not change at all in the last 10 minutes. That bogus trade had no effect whatsoever.

> the closing quote for MUNL is a gouge based on the panic move straight up from 3 pm. a stock that moves that much that fast gets a gouge factor in all its options, puts and calls alike.

This is what I think too. It surprised me though, because I was expecting the premium to swell as the stock dropped; i.e., as puts became more and more obviously the "thing to do" they would get more expensive. Didn't happen. Instead, they became more expensive when it looked like MU was getting a lot of support. I suppose no one was fooled, and everyone would see it as an opportunity to buy more puts, hence they were made more expensive.

> there's a big dumperoo planned for early tomorrow;

I guess that's another way to say the same thing.

My boat is fully loaded now.

Hopefully the MU bears (whether the perma- or opportune variety) can make some serious dough on Wednesday!

Land_Lubber
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