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To: The Perfect Hedge who wrote (4357)	12/3/1997 2:21:00 PM
From: Big Dog	Read Replies (1) \| Respond to of 95453

Because they think the price of the stock will be above 45 by expiration -- I guess. Or maybe they don't mind buying the stock at 45 and they get the 6 points plus premium now. So that makes their today net cost 39 less the premium. If the premium is 2 then they buy the stock today for 37 instead of 39. So to speak. It's actually an excellent trade IF you are sure you want to own the stock.

To: The Perfect Hedge who wrote (4357)	12/3/1997 2:22:00 PM
From: SJS	Read Replies (1) \| Respond to of 95453

Becuase they think it will go up, and want not to BUY something. PS: The BB site was helpful, so the answer to my questions are: 1) Use 20 days, and use 2 standard deviations: Here what he said, which is exactly what I wanted to see: Bollinger Bands -- Bollinger bands are bands drawn around the price structure that answer the question as to whether prices are relatively high or low. They are governed by volatility. In their standard form they are the 20-day simple moving average plus and minus two 20-day standard deviations. Bollinger Bands were created by John Bollinger, the founder of Acme Analytics and the creator of this site.