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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Ally who wrote (21304)	3/20/1998 10:21:00 PM
From: Ben Antanaitis	Read Replies (2) \| Respond to of 42771

Steve, Denise, The threshold price is set by your brokerage firm. Thie is the section on 'automatice exercise' from the CBOE handbook: On the other hand, if the option has an automatic exercise feature-such as one that will cause the option to be automatically exercised at the expiration if it is in the money by a specified amount- the option may be exercised at a price at which the holder would not voluntarily choose to exercise in view of the transactions costs of exercise or other factors. The transaction costs associated with the exercise could even exceed the cash settlement amount of the option, with the result that the holder would realize a net loss from the exercise. Conversely, an option that has a cash settlement amount that is less than the threshold amount cannot be exercised even though the option holder's transaction costs may be low enough to permit the option to be exercised profitably. In such a case, the option may expire unexercised. See: cboe.com for more info. But the cutoff is set by the brokerage, and Joe-six-pack usually gets a $.75 cutoff.... the brokerage house wins. But you should check with your broker, you may be surprised. Ben A.

To: Ally who wrote (21304)	3/24/1998 9:37:00 AM
From: Rich Young	Read Replies (1) \| Respond to of 42771

If you're less than 3/4 point in the money at expiration and you haven't sold the option, you have to call your broker to execute them, otherwise they will expire worthless. By the way, you have until 5:30pm (pretty sure) the Friday of expiration to execute and pay for the purchase/sale of the stock. I had this happen to me last month on some calls I held that were about 3/8 or 1/2 in the money, didn't have the cash to execute & lost about a thousand bucks on the deal. Needless to say I was not a happy camper. The lesson is: if you don't intend to execute your long option position, make sure you sell them before close on the third friday of the expiration month. Rich