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Technology Stocks : DELL Bear Thread -- Ignore unavailable to you. Want to Upgrade?

To: Ally who wrote (208)	3/17/1998 10:02:00 PM
From: lin luo	Read Replies (1) \| Respond to of 2578

For the funds or institutions or DELL itself, these options are usually covered positions. Since DELL price is up a lot recently, the call buyers usually don't really care, their positions either hedged or spreaded. The put writers might have a chance this time to push the price in the money. I am not surprised to see DELL will go way down, it is just it will come back in no time when the March-May session is over.

To: Ally who wrote (208)	3/17/1998 10:02:00 PM
From: Ally	Respond to of 2578

Dave, .. yet another research analyst (Merrill Lynch) predicting pc price war... biz.yahoo.com

To: Ally who wrote (208)	3/19/1998 4:44:00 PM
From: jjs_ynot	Read Replies (4) \| Respond to of 2578

Denise, Finally getting a chance to respond to your query about the effects of options. BTW so far stock has stayed more or less in the range that I expected 62.5 to 65. Here's the way that I understand it for large outstanding options near expiration. If stock goes up out of equilibrium range between puts and calls the institutions owning calls will sell stock or sell short because they can exercise the calls at the strike price and thus a profit is locked in. The sale of stock drives price down. If a stock goes down the institutions holding puts buy the stock since they have the option to sell it at higher put prices. The purchase of stock drives the price up. The range of equilibrium between puts and calls is called parity. Near option expiration; stocks are often locked into a trading range near parity. Now much, much more sophisticated strategies than the ones above are used by various hedging bodies and market makers to lock in profits near expiration. However the market effects produced are the same as described above. Dave