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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: William who wrote (11131)	11/15/1997 2:42:00 AM
From: synchro	Respond to of 70976

It is theoretically impossible to have an option price higher than the stock price. Arbitrage would drive the option price down faster than Niederhoffer detonate his portfolio with short index put options.

To: William who wrote (11131)	11/15/1997 10:31:00 AM
From: Michael R	Respond to of 70976

William, Options with longer times to expitation usually become much cheaper for each additional increment of time. The factor 4.6 used in your analysis would most likely be lower. Your point however is very valid, the cost would invariably become higher as more time was added and the product would become unattractive. My post #11088 speculated about a longer term option and I suspect that longer then 2 years might be practicle, but 10 years would be expanding the limits of even my vivid imagination - that's exactly why Tito's reinvestment idea (on a limited scale) has some appeal. Regards, Michael