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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (94331)	2/3/2002 12:20:08 PM
From: Tommaso	Read Replies (1) \| Respond to of 132070

Not in this case. The decay, in this case, works in my favor since I am paying less than the intrinsic value of the option. American-style options always cost more than the intrinsic value because of the time value. Anyone who buys and exercises and American-style option automatically loses the time premium. But exercise is impossible until expiration with the European-style option and this disadvantage has resulted in their selling at a discount to intrinsic value rather than a premium.