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Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Tom Trader who wrote (31486)	12/18/1997 5:00:00 PM
From: MonsieurGonzo	Read Replies (3) \| Respond to of 58727

Tom (or anyone) RE:" OEX options pricing relative to index levels " Today I flipped my (day trade) OEX PUTs to CALLs at about the "apex" of the day, around 1515 EST. Bought 10 OEXLK 455 CALLs. At that time, the OEX was at ~454 and the OEXLK BIDxASK was bouncing around between 2-1/2 and 3; I caught an ASK at 2-3/4. The OEX subsequently went up to ~456 and the BIDxASK was 3x3-1/4. I held, expecting either a flat or buy-into-close, ( which didn't happen - but that's not the question :-) As I was then watching the OEX index and the OEXLK BIDxASK on my trading console, the OEX starts to fall from ~456, and ends up at ~454.5 close, about 1/2 point above where I executed the option buy. But the OEKLK BIDxASK plummeted during that last 20 minutes, and ended up well below the original 2x3 ASK range, at 1-3/4 x 2 (!) Needless to say - I wasn't expecting that. Live and learn {grin} - now I need to learn. What are the causes of this phenomenon ? -Steve