Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: Caroline who wrote (2946)	7/4/1998 12:33:00 AM
From: Mandeep Bhullar	Read Replies (1) \| Respond to of 21876

Caroline, First, the Web site is not mine, I just use it from time to time. The way I understand parity is the value at which the stock price will converge as option expiration approaches. Many folks subscribe to the theory that most institutions are selling calls and puts, which means they will make money if options expire worthless. Personally I don't place much credence on this. For e.g the parity for July for Lu according to this site is 70, however, at this stage it is "highly unlikely" the price will converge to this value. Since the stock is trading much higher it is evident the folks who sold July 70 calls have lost money. Another example the site shows the parity for AOl for July to be 50, the stock is trading at 110, completely blows this theory away. To me the game is not that simple, can't simply look at the option price where most calls and puts will expire worthless and assume stock will close around that price. Again this is my personal experience. Regards, Mandeep