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Technology Stocks : Novell (NOVL) dirt cheap, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Ben Antanaitis who wrote (23128)	7/20/1998 11:14:00 AM
From: Paul Fiondella	Respond to of 42771

Here's another stab "the 5449 call contracts were exercised and had the shares transferred to the new owners" The premium on the 12.5 at the close was 9/16ths. The premium on the 10 at the close was 3 1/4. the stock closed at 13 1/8. "if they don't have the cash to cover the stock purchase they" had to sell this morning. However had they sold the option Friday on the 12.5 they would have been 1/16ths under the stock price and with the 10, 1/8th over the stock price. Therefore anyone holding the 10 had an incentive to sell the option Friday, there was no reason if they were a trader to wait over the weekend to take a chance on what happened this morning. Similarly would a trader take on the 12.5 at 9/16ths hoping to dump the stock on Monday for the closing price or better--- a 1/16th point? I doubt it. That only leaves two categories. First category is those who paid more than 9/16ths for the 12.5 (the 10 option holders couldn't have paid more than 3 1/4 so they don't fit here). Second category are those who got delivery that they didn't want because they were either too lazy to sell on Friday or couldn't sell because of the lack of a market in this stock. ===================== Certainly the sell-off burned them for 1/2 a point.