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

To: Sr K who wrote (44603)	5/24/1998 1:17:00 PM
From: Bilow	Read Replies (1) \| Respond to of 176387

About those Nov 55 DELL puts... I went through the arbitrage equation versus the Nov 55 DELL calls, and sure enough, the market maker is under-pricing the puts relative to the calls. (i.e. the long the stock, short the call, long the put locks in a profit at expiration, while short the stock, long the call, and short the put locks in a substantial loss at expiration.) The upshot is that obviously someone did sell a lot of puts, rather than buying them, and this has driven the price of the puts to a cheap level. (Except that the implied volatility for both the calls and the puts is kind of high.) -- Carl