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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: PMS Witch who wrote (26103)	7/15/1999 12:01:00 PM
From: Tom Bunge	Read Replies (1) \| Respond to of 74651

"One can 'mix & match' their option position to take advantage of the differences in how options are priced in relation to the underlying security". One major factor there, it seems to me, is tied to just how much "in the money" you are. An msft 50 long leap call is almost ownership which you finance - with a lot of money - at the level of almost 50% ... makes sense that your time and volatility premiums be the lowest. The premium increases progressively as you move out of the money. The strategy, in this example, seems more like between stock ownership/acquisition, leverage and financing than taking advantage of any specific option pricing. In some ways, it would seem to apply to any stock. As such, a pretty good strategy ...