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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: Alan Levin who wrote (39273)	2/14/2000 10:32:00 AM
From: Alski	Read Replies (1) \| Respond to of 45548

Alan, No, it's not the same thing as an ordinary cash dividend. Option holders are not entitled to any ordinary cash dividends. A spin off (or split) represents a material change in the underlying security and as such, is not an ordinary dividend. The options will be adjusted accordingly. If a stock splits, even if the split is paid as a "dividend", covered call writers do NOT get to keep the new shares and still sell the original shares at the old, pre-split strike price. Just like shareholders don't have to pay income tax on the "dividend". Geez, how unfair would that be! Either the number of shares per contract or the strike price is adjusted per the split ratio. A spin off is the same thing (sort of). FWIW...Alski

To: Alan Levin who wrote (39273)	2/14/2000 5:47:00 PM
From: Harry Sharp	Read Replies (3) \| Respond to of 45548

Alan, Then tell me why option prices are going up when you feel that COMS option holders will not get any PALM? If your senerio is correct option prices should drop since COMS will drop maybe to half price after the spinoff. Listen to Mang, you'll get the PALM options.