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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: The Reaper who wrote (499)	1/2/2000 1:22:00 PM
From: Neal davidson	Read Replies (1) \| Respond to of 8096

<<Two things stand out to me regarding this strategy. 1) The leap spreads are around 5 pts. so I don't think that buying at the bid is doable. However, it still seems to be a pretty cheap premium to pay for these leaps.>> In the interest of precision, the bid-ask on the ZNOAZ is 117 3/8 - 118 7/8. The premium is cheap, and I think this bargain will disappear early next week. I do not think that the lack of premium is indicative of an impending townturn in the common. Rather, I think this is one of those rare moments where the market is not quite efficient, and we as investors can take advantage. Like I said, I do not think this will last. A stock with QCOM's volatility (9% move on Friday alone) should not have such a small time premium IMHO.

To: The Reaper who wrote (499)	1/2/2000 2:25:00 PM
From: Jill	Respond to of 8096

Jim Willie is saying the same thing over on the QCOM thread--how low the time premiums are. Why is that? What could "MMs" know--? It's strange. By the way I take the liberty of reposting his QCOM post on DIM Jan options if any of us own: on option time premium, a note of caution for holders of deepinmoney option QCOM calls, we aint got premium at all, nothing to risk... check former Jan400, now Jan100... it trades at parity plus maybe one point... all premium (despite three weeks remaining), have been stripped out... tells me that the liquidity behind deepinmoney calls is purely MM's conversion to shares at parity, no market trading at all some might think that they will see option price premium erosion in the next three weeks happening rapidly... EARTH TO TRADERS, it is all gone... if you think QCOM will be higher in week#2 than on Tuesday, then wait... you risk nothing in option time premium, nothing you have no risk whatsover from premium decay over remaining three weeks... the entire risk is with QCOM share price since your option is trading at parity... parity is defined as QCOM share price minus your strike price... constantly amazed that option traders do not make this simple subtraction to separate intrinsic value from time premium many options will likely sell at the open tomorrow... I look for a quick drop, but not to 161... not that bad... I expect a quick recovery, and then another drop or two during Monday, Tuesday, Wednesday... but each time, I expect a recovery... too many little retail buyers coming in, bellying up to the bar