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Non-Tech : Iomega Thread without Iomega

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To: David S. who wrote (9773)5/10/1999 7:26:00 PM
From: Drapeau   of 10072
 
High volume on May and August Puts 7.5 can be due to small difference between the two premium of May and August contract.

Someone who bought May 7.5 Puts can sell these Puts before May expiration and buy August 7.5 Puts. The premium difference is only about 1/4. This buyer want to keep his shares, and have the protection of the Puts maintained.

The risk for the Puts writer is to have the obligation to buy IOM at 4.50 until August expiration. Acceptable risk IMO.
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Drapeau
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