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

To: donald sew who wrote (33477)	1/18/1998 7:22:00 PM
From: sergio	Read Replies (1) \| Respond to of 58727

Don, Yes in absolute terms the lower index value (100 vs 400) do have have smaller premiums, but relatively if the OSX premiums are 10 pts and the XOI premiums are 15 pts you are paying nearly 10% premium for the OSX's and only 3.75% on the XOI's. And you say they move the same amount in pts (assume +/- 5 pts), then the volatility of the OSX is 5% whereas the XOI would then be 1.25%, so OSX has higher volatility. This then is reflected on the premiums. Sergio