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Technology Stocks : Altaba Inc. (formerly Yahoo) -- Ignore unavailable to you. Want to Upgrade?

To: fut_trade who wrote (3836)	12/7/1997 11:01:00 PM
From: LRS	Read Replies (1) \| Respond to of 27307

<<Covered call selling -- could be. For that volume, how would the option specialist hedge such a transaction? Wouldn't it be better to write out of the money calls?>> I have no idea. Maybe the option specialist is making a market in the stock also. Any expert opinions out there???

To: fut_trade who wrote (3836)	12/7/1997 11:15:00 PM
From: Mama Bear	Read Replies (2) \| Respond to of 27307

>>>Covered call selling -- could be. For that volume, how would the option specialist hedge such a transaction?<<< If he buys the call he shorts the stock. If he sells the call he buys the stock. Same as he would on low volume. >>>Wouldn't it be better to write out of the money calls?<<< Not if you think the common is going to fall. April 60s (as far out of the money as you can go) closed at 8 1/4 bid. Maximum profit = 8 1/4 April 40 calls 18 7/8. Maximum profit = 18 7/8. But the 40 calls will fall almost dollar for dollar with the stock for the next 10 points or so, because it is almost entirely intrinsic value. The 60s are entirely time value, and therefore will not start to fall much until the stock drops to 50. Barb!