Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Gary Ng who wrote (60444)	6/3/1999 10:56:00 PM
From: Elmer	Read Replies (1) of 1582290

Re: "I still don't quite understand. 100 share of AMD would equal 1750 and the free money for each contract is only 11/16, how can that be 4% ?" You are right to be confused, it is confusing. Yes each contract is 100 shares, but the price, 11/16, is per share, so that would total 68.75. Selling 1 contract would eat you alive in commissions and most people who play options sell 10-20 contracts or more. 10 contracts would bring you 687.50 with the risk of $17500. 687.50/17500 = 3.9% for 2 weeks until options expiration. That's about 1/2 month or 1/24 of a year so 3.9%*24= 94% annualized. EP

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