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To: santhosh mohan who wrote (5465)	1/1/1998 5:58:00 PM
From: Erich White	Read Replies (2) \| Respond to of 27307

All, I'm new to the thread, and in fact, new to following YHOO, so forgive me if this has already been posted here. Found this article on MSNBC site yesterday touting YHOO as being in for a sure fall... msnbc.com --Erich

To: santhosh mohan who wrote (5465)	1/1/1998 6:20:00 PM
From: Rational	Respond to of 27307

Santosh: European Option premium/price = Discounted Expected [Max(0, S_T - X)], where S_T is the price of the stock price at maturity T. Generally, the term "time premium" is for loose talk and I used this term because some posts were referring to it. The time value is built in to the option formula price and is an increasing function of T. When you are comparing two options on the same stock with the same T, but two different strikes, then making an argument of the type I made in #5205 is valid. If a stock does not pay dividend, European Call = American call. << But, at least as of Friday, this was not happening since (as I had noted in an earlier post), some of the call option values were rising despite a fall in the stock price.>> Your point about perceived volatility changing is interesting. But are the trades (option and stock) synchronized? You may be looking at option trades prior to YHOO dipping in price. Actually, I meant Wednesday (not Friday). The volatility was low around the trend because the stock was rising almost secularly. But, when it fell on Wednesday (while the market was mostly up), the perceived volatility must have gone up. When trade sizes are 250 contracts, I believe the traders will be looking at the price of the stock and the market, but there cannot be a perfect synchronization. Sankar