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Strategies & Market Trends : Options for Newbies -(Help Me Obi-Wan-Kenobe) -- Ignore unavailable to you. Want to Upgrade?

To: Madpinto who wrote (829)	5/12/1998 12:04:00 AM
From: LTK007	Read Replies (2) \| Respond to of 2241

I am extremely new to options and have yet to make a play,and I want to ask "real situation" questions--I saw today that GTE may65 calls are selling at 1/16.Now because I have never even done this I am really going to ask stupid questions.--First is,if I buy 100contracts for GTE may65 calls and they(as the odds strongly,strongly suggest)expire worthless how much have I lost,and does the price of GTE below 65 factor into the extent of my loss?(for instance GTE is 57 or 61,does that vary my loss?) Second,by a stroke of wild luck a rumor leaks out on Wednesday that AT&T and GTE are in merger talks and price runs to 65&1/2 by Fridays close,then with my 100contracts at 1/16 purchase,how much do I make? Sorry for dummy questions,but an answer would give me a greatly expanded understanding of how this works.Thank You,max90