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To: Broken_Clock who wrote (2089)	8/24/1998 10:34:00 PM
From: Thean	Read Replies (1) \| Respond to of 14427

Papaya - this is the last post on MU tonight and it is just a mathematical exercise. I completely failed to see how a $5 investment up front by buying both Sep MU call and put at $30 can make me money when MU gets to $33 ro $27 within four weeks, unless you are assuming MU will travel outside of these two price points in two separate occasions and I pull the trigger to cover in both cases in the nick of time. This is not 50:50, Papaya. Let's do the math. Assuming a total random walk model, there is a fair 1/2 probability it will go up 10% within 2 weeks. Then if you further assume it will change direction and head the other way and move 20% with the probability of 1/2 x 1/2 = 1/4 (since 20% change is twice as big a move as 10%), we are talking about a probability of 1/2 x 1/4 x 2 = 1/4 or 25% chance. where 1/2 is the first 10% move 1/4 is the second 20% move 2 is because it can happen in two ways, either up-down or down-up which really doesn't matter in this example. I don't like 50:50 chance. You think I like 25% chance?