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Technology Stocks : CMGI What is the latest news on this stock?
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To: AmericanVoter who wrote (8153)5/12/1999 1:25:00 PM
From: PAL  Read Replies (1) of 19700
 
Amein:

As I posted to Jill: I am putting theory into practice.
You are quite correct that we operate under American Style type option for equites (as opposed to European style), where the option can be exercised anytime. Is there a chance that the option is exercised before expiration. Of course there is, but it is not the norm. Why? The answer is Time premium . As long as there is a time premium, the option holder will be better off selling the option than exercising it.

There is a limited gain as you said: you are quite correct, but percentagewise, you cannot beat it.

Limit of gain $ 300/ share on investment of $ 0. The percentage gain is undefined. Dollarwise it is limited
Buy and hold: CMGI goes to $ 2,398/sh, gain is $ 2,180 or 1000%. Although percentagewise it is not as big, dollarwise is better.

Paul
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