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

To: Porter Davis who wrote (1539)	5/9/2000 5:39:00 PM
From: Dave.S	Read Replies (1) \| Respond to of 1598

C-MAC Industries Inc CMS Shares issued 67,438,149 May 8 close $62.50 Tue 9 May 2000 News Release Mr. Andrew Molson of the Montreal Exchange reports The Montreal Exchange has listed options on the common shares of C-MAC Industries Inc. Series expiring in June, July, September and December with strike prices of $60, $65 and $70 are listed for the class. Scotia Capital Inc., represented by Trevor DeFreitas, has been appointed specialist for C-MAC Industries Inc. With the addition of this new options class, the Montreal Exchange now has a total listing of 138 options classes.

To: Porter Davis who wrote (1539)	6/12/2000 12:03:00 PM
From: Goldberry	Read Replies (1) \| Respond to of 1598

Hope you are settling in well in Montreal. I hope you can give me some insight into leaps and the market maker pricing. With regards to the CIBC $25 02's. Stock is trading at $44.40 asked is $20.30, Stock is at $44.30 asked moves to $20.20. Time premium is being kept at 90 cents. This boggles my mind. Time left is about 20 months cost of borrowing the $25.00 to cover the position is at prime rate less dividend yield (7.5-3.0) about $1.65. Based on this I would have thought that the leap should trade at a minimum of the cost plus some additional premium. It would seem this provides the big spenders a guaranteed way to make money. Buy the leap, short the stock and sell the short term calls. Can you enlighten me?