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

To: Eddie Kim who wrote (59518)	8/19/1998 12:09:00 PM
From: Dell-icious	Respond to of 176387

OK. Let's say you make markets in DELL options and someone comes to you and asks you to buy DELL 120s for Aug. You ask for a premium since you are shorting dell and DELL may shoot up beyond 120 in the next 3 minutes and you want some premium to help you juggle the risk and the buyer expects to pay a premium since he is greedy and expects it to shoot up. Now you go and ask to buy deep in the money DELL calls. These calls will move like common, $ for $ unless DELL stock price crashes and reaches close to this price. Basically Time premium is gone. The premium is around the strike price. BTW : Disclaimer : I trade options regularly but I am not a stock pro. I will be glad to get better explanantion for what Eddie is asking about. Also Eddie - that's the way it works. The guys collecting the premiums are the one taking the risk and expected to be rewarded for the risk of having the nerve to short DELL Aug calls near the strike.