Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (18560)	4/9/1998 8:21:00 AM
From: SJS	Respond to of 95453

John, Thanks. I've seen that before (I've written one myself), but have been doing this so long I can do the calc in my head much faster.... Steve

To: upanddown who wrote (18560)	4/9/1998 10:13:00 AM
From: Lost in New York	Read Replies (2) \| Respond to of 95453

Steve said: 25 (strike price) - 22.75(current cost) = 2.25(stock appreciation) 2.25(stock appreciation) + 1.125 (call value) =3.375 (total return) 3.375 (total return) / 22.75 (investment cost) = 14.83% return if called John said: It gives a slightly higher return (just over 15%) even though it factors in both the option commission and the stock commission (if exercised). Not sure why but it seems to be because it treats the premium as a reduction in cost rather than an increase in return. Look at it from a cash out of your pocket point of view. $22.75 - $1.125 = $21.625 out of pocket cause you get the option premium up front. get called at $25 for a return of $25/$21.625 or 15.61% Dave Obviously commissions would affect the return.