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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Jill who wrote (54937)	12/18/1999 12:11:00 PM
From: PAL	Read Replies (2) \| Respond to of 152472

Why don't you like the split impact on puts? Just because you have so many more of them? Jill, you are one smart lady!!! That is one of the reason. Edamo, that brilliant put seller had problems with a brokerage firm which put a limit of 100 naked puts. If right now you have just 26 contracts, you will be over the limit with that broker. Ed changed broker. The second and main reason is psychology of the market. Let us just say you have s/p 360 and qcom is at 440, it is 80 points OTM. Let us just say you are 5 days close to expiration. The chances of qcom to drop 80 points in 5 days is remote. your option will expire worthless. 4:1 split. Your s/p is 90 and qcom at 110, the chances is better that qcom can drop 20 points in 5 days so that your option will be ITM. Percentagewise it is the same drop, but pointwise 20 point movement is more likely than 80 point movement. Good Luck Paul