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

To: Electric who wrote (37722)	3/30/1998 11:03:00 AM
From: Patrick Slevin	Read Replies (1) \| Respond to of 58727

I don't know what CNBC's reference point is, I do not watch CNBC as a rule. Only if it is on while I am at a bar or at a card game. Even then I can get everyone else to let me watch Bloomberg if I like. So I suppose by -3 he means the futures are down 3 at the open. I'm not familiar with looking at it that way. I just watch the PREM. Once the open has come and gone, the cash is moving around with the futures, so you have to watch PREM. If I'm going to spend all day watching PREM, I'm not going to do a conversion to interpret CNBC for the 5 or 10 minutes surrounding the open. I'm never in the market overnight anyway so what can I do about what happens at the open, unless I have already decided that that was the time to take a position. When you say their PREM is at -3 intraday, that is not so. It is rare to see the future trading at a discount to the cash except either in a very fast market or near the end of the contract month. PREM right now for example is 10.96, right around Hank's version of current FV. I said current FV because FV decays over the life of the contract. It is not necessarily a linear decay. On his site somewhere is a formula for FV. I'm certain you will get an idea how it works by looking at the formulae. Also, I posted some time back a site where CNBC posted their formulae. I can find it if you like. Here's another one. I do not believe I have read it all the way through. Boring stuff. cme.com