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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Maxer who wrote (44203)	5/21/1998 8:44:00 PM
From: Meathead	Read Replies (2) \| Respond to of 176387

If you owned a Nov 55 put, you would have the right to sell Dell stock at 55/shr in Nov of 98. Doesn't sound like a good deal does it? Today you can sell it for 87. In November, it's likely you'll be able to sell the stock for above today's 87... extremely likely you'll be able to sell it for above 55. If you buy that put, odds are your are paying for something worthless. There is a small chance it could become worth something if the stock tanked and traded below 55 however but the odds are slim. The seller of these options (Dell or whoever) just received about 5million dollars for selling something worthless. The seller believes the stock will be above 55 in Nov. This is money in the bank.... this free money could be used by Dell to buy back stock if it was them who sold. MEATHEAD

To: Maxer who wrote (44203)	5/22/1998 7:31:00 AM
From: Jerry Miller	Read Replies (1) \| Respond to of 176387

Hi Max, Meathead's got it right. when you buy puts, you're betting the stock will go down. when you sell puts, you're confident the stock won't reach your strike price...in this case 55, by the third Friday in November. being in or out of the money is all relative to the price of the stock at the time. if you own "in the money" puts: the stock price is already below your strike, and you'll show a profit. if you own "out of the money" puts: the stock price has yet to go below your strike and until then, no profit will exist. it's easy to see then that this move was brilliant on Dell's part, if indeed they sold these November 55s. like Meathead said, anything can happen, but more than likely the shorts will wind up financing our buy-back program. pretty slick, huh ?