Dell Technologies Inc. Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Dell Technologies Inc.

DELL 128.09

-4.3%

9:54 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: TigerPaw who wrote (115979)	4/10/1999 2:23:00 PM
From: BGR	Read Replies (2) of 176387

TigerPaw, If you are talking of calls, in general, no, as the volatility usually shoots up with a strong drop in equity price. For example, if DELL drops to 40 (say) but the implied volatility (think of this as the riskiness inherent in the equity, which will grow because of the sudden fluctuation) increases from the present 65% to 70%, the call prices will remain almost unchanged. The put price OTOH will get a double booster dose, so it will increase in a phenomenal manner from the twin engines of lower prices and higher volatility. If I had the mentality of a put seller (given that I consider DELL to be in a very strong position) I would probably make a killing by selling puts (even if DELL equity price remains the same, simply as the volatility subsides). A few days afterwards (I believe with INTC earnings out) the uncertainty will decrease and so will the implied volatility. If the equity price is still depressed, then would be the time for the options to fall dramatically. -BGR.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next