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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Yougang Xiao who wrote (97634)	3/9/2000 2:31:00 PM
From: Joe NYC	Respond to of 1571033

What would be the option price for April 50 and July 60 when the stock hits 70 in the next few days? You probably know that the option price is combination of the intrinsic value (in the money portion) + the premium. The premium depends on time to expiration, volatility and to some extend interest rates. With stock at 70, April 50 in-the-money portion would be 20, July 60 would be 10. When you get deep in the money (as in April 50 with stock at 70, the premium tends to become smaller and smaller, not much more than a dollar, with spread increasing to $.50 or more. July 60 could still have maybe $4.00 or so premium. Joe