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Technology Stocks : BORL: Time to BUY! -- Ignore unavailable to you. Want to Upgrade?

To: Jack Gibson who wrote (7306)	11/12/1997 10:35:00 AM
From: Neil Booth	Read Replies (2) \| Respond to of 10836

Hi Jack, Thanks for the reply. The reason I asked about the put is that the price of a put and a call, that expire on the same date, are very tightly bound. If the stock is at 11 1/2, and the $10 calls at 11 15/16 (our situation I think), then the put at $10 must be trading at 7/16. It just sounds a little high to me for the January expiry. Would you value the put at 7/16? The calculation is (10 + 1 15/16 - 11 1/2) equals 7/16, the price of a put (with a slight but negligible approximation in the case of such low-priced and short-dated options). In general, Call - Put = (Stock - Strike) * discount factor. Discount factor is almost 1 for short dated options in dollars. Neil.