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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (45891)	2/5/1999 2:29:00 PM
From: Tommaso	Read Replies (1) of 132070

I don't have the absolute current quotes, but the MU 50 puts of 2001 look quite good right now. The stock was down 10% (to 68)and the puts had hardly moved (staying about (9 1/2)--and the strike-minus-the premium was about 41, so that the stock would only have to drop another 27 points some time in the next two years to put a buyer absolutely in the money, regardless of the premium. Given the volatility of MU, that seems like a fairly good bet. OK, somebody tell me what's wrong with this thinking? I am trying so see if there's something a little better than seat-of-the-pants guessing in estimating risks of LEAP puts. Prices quoted above have no doubt changed as I write this.

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