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

To: johnd who wrote (29007)	9/1/1999 7:02:00 PM
From: Teflon	Read Replies (2) \| Respond to of 74651

jd, I just don't know...this activity has me a little puzzled. One thing to keep in mind, however, is that the buyer of the Sept 120 Puts will make $$$ if MSFT continues to slide in price between now and expiration in 11 business days. It's essentially a bearish play on the stock, though a strange one at that. Teflon

To: johnd who wrote (29007)	9/1/1999 7:16:00 PM
From: lin luo	Read Replies (2) \| Respond to of 74651

This deep deep-in-the-money short-term put has almost no time-value and to play it is equivalent to play the stock directly (short). The difference is that they only need $28 to play $92 stock. For shorting a stock you may need half value of that stock as a margin. It is almost the same thing to short MSFT, only w/ much less money, also provided the liquidity is good.

To: johnd who wrote (29007)	9/1/1999 8:22:00 PM
From: codawg	Read Replies (1) \| Respond to of 74651

>>Why would some one buy 16950 contracts of Sept 120 puts at 28.<< When someone buys puts this deeply in the money, it's a proxy for the common. In other words, it's a cheap way to short the common over the next 11 trading days and get basically one to one price action (this is called a "good delta" by us option wonks). Maybe Alan Abelson opened a hedge fund and couldn't wait to get short Microsft. However, there is no way to know if this is a buy of the puts or a sell of the puts by whoever originated the transaction. Therefore there is no way to know if it is bullish or bearish.