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

To: Gabriel008 who wrote (48052)	6/17/1998 11:28:00 PM
From: jbn3	Read Replies (2) \| Respond to of 176387

Gabriel, Just responded to Tim on same subject. Based on purely empirical evidence from the May expiration, when the price dropped nearly 10 points, apparently in order to close on expiration EXACTLY at the nearest option strike, only to climb another 8 points back the following Monday, I decided to take Ben A's project a bit more seriously, and run a small experiment. Accordingly, I took the following steps, beginning Monday before Michael spoke... a) closed out my short against the box at 80 7/16 (500) and b) bought 5 June 80 calls at 2 7/8 which I then c) sold 5 June 80 calls at 4 1/2 (should have waited!!!) d) sold 5 June 85 covered calls at 3 today, expecting them to expire worthless on Friday. Thus far, my experiment is progressing satisfactorily. <vbg> Were it only the calls in consideration, I think you would be correct in projecting more of a down. However, options strategy must also include consideration of the associated puts. Therefore, the further down the price goes, the more puts come into the money. Ben's site posits an equilibrium position between calls and puts. For DELL for the June expiration, that position is a price of $85. Comments? Regards, 3