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Technology Stocks : TECD - Tech Data

TECD 144.90

0.0%

Jun 30 5:00 PM EST

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To: Baggins who wrote (84)	2/11/1997 7:56:00 PM
From: winston paris	of 584

Most options sold on equity options are bought by market makers, who NEVER exercise early (excluding dividend plays) thus maximizing their short stock interest rebate. Selling out of the money options can be tricky primarily because there usually isn't much depreciation on the option until the final month. Still, as a hedge and revenue vehicle they are formidable tools. Nonetheless, what really changes an option's relative value is volitility. And that is something the market makers control...TECD's option volitility has gone from the mid 30's to as high as 60, so if you sold far out calls when Vol was low, you are probably wondering why your options have actually gone up while the stock has collapsed...this is understanable since the stock has moved almost an entire standard deviation...anyways, I will not mention options again on this thread as I sympathise with those who could care less... Winston

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