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To: Knighty Tin who wrote (33520)	5/15/1998 8:57:00 PM
From: TREND1	Read Replies (1) \| Respond to of 53903

mike you wrote <<The collapse of pure put premium is one reason why credit put spreads,(short the 30s, long the 25s, in this example), which are bullish, perform so well so often and so quickly. >> Now mike be nice ! You forgot two maybe important points: (1) You can get called on the credit put spread before you have a profit. (2) And the spread is not based on last price, but the spread of the ask in one and bid in the other. Please correct me ,if I am wrong, you know I do not like options. Larry Dudash

To: Knighty Tin who wrote (33520)	5/15/1998 9:04:00 PM
From: TREND1	Read Replies (3) \| Respond to of 53903

mike You are really into options, maybe you can give a little discussion how today's ex....causes MU stock to be bought and sold by way of unwinding "synthetic" positions ? ...................................................... Or what goes down today....has a high probability of rebound on Monday...but not always. ..................................................... Larry Dudash

To: Knighty Tin who wrote (33520)	5/17/1998 10:44:00 PM
From: DavidG	Read Replies (2) \| Respond to of 53903

Mike, Thanks for the response. I have been trying to review the charts on some of these PUTs we are discussing and it gets more confusing as I dig deeper into it and makes me realize how little I understand about their function. I am glad you mentioned degradation in premium as it approaches in-the-money value b/c this is where it gets very difficult to follow...and where I lose trust in the specialists setting the price. More times than not I am forced to deal with the expansion and contraction of the pure premium toward the intrinsic value...which behaves in a non-linear function and one can not help but become highly suspect of the CBOE for not giving the true value. As an example, in the last hour I was looking to get some calls to go with the short position I had in MU and the MUGFs were sticking to the 1 3/4 price. Finally they gave in to me at 1 1/2 which I felt it was worth...but only after I cancelled my order and they had 15 minutes of pending to make a decision...which BTW is a lot of time when a stock is moving. This is why I have a difficult time trading these PUTs on MU... and we haven't scratched the surface with the problems of the large spread and low volume which are also significant disadvantages to the trader in the short term. As far as out-of-money PUTS/CALLs I tend to agree with you that there is a place, but I am still collecting the data on time/value for options at different strike prices. I was wondering if you knew a few sites that can give some strategy to these PUTs and possibly some trading programs to determine option value to stock price that could be used for trading? Quite frankly I have not had the best performance in options vs the performance of the long/short positions b/c of the disadvantages described above. TIA DavidG