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

To: Logos who wrote (49162)	6/26/1998 4:55:00 PM
From: Ben Antanaitis	Respond to of 176388

Logos, At expiration, 3rd Saturday of July, if Dell is at 94 then the puts would be 'in the money' and if assigned he would have to buy the stock at $9500/contract+commissions. The premiums have nothing to do with the 'exercise' of the in the money puts. Ben A.

To: Logos who wrote (49162)	6/26/1998 5:08:00 PM
From: jbn3	Read Replies (1) \| Respond to of 176388

DELL puts Logos, I stated that I had written DELL July 95 puts, and that ideally DELL would close at 94 and I would graciously accept the forced trade. In answer to your question, "How is that a forced trade? Shouldn't premium be counted?" -- The put options I wrote convey to the buyer the right to sell me 100 DELL shares per contract at a price of $95 any time up to the third Friday in July. So if DELL closes at 94, he can buy at 94 and immediately turn around and exercise his option to sell to me at 95. In most cases, one considers it ideal if the stock price ends above the put strike, so that the option expires worthless and one keeps the premium. In this case, it would be ideal for me to have to buy DELL about $1 less than the strike, because then I will own more DELL going into the earnings and possible split. Yes, the premium counts, but not at expiration. At expiration all that counts is whether the contract is in the money or not. Basically, my rationale in selling the puts is this: DELL is currently trading at about 92. I can get about 8 1/2 premium for the July 95 puts I think that DELL should be going up in July due to good reports coming out and the shareholders' meeting. I think that DELL should go up in August because of good earnings (Note this is JMHO, DELL may have terrible earnings: I don't think so). Even if the stock price does not go up and the contracts get exercised, my effective purchase price for the stock is (95 - premium - brokerage charges = approx) 87. ________________________________ = Bottom Line: I am willing to buy DELL at 87. Hope that explains what I meant. DELLish, 3.