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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Berk who wrote (24898)	10/5/1998 9:09:00 PM
From: MrGreenJeans	Read Replies (1) \| Respond to of 70976

Dick-Delta the closer to the strike the more closely the delta approaches one Incorrect. The closer the stock price is to the strike price makes a delta approximately + /- .50 depending on whether one has a call or put. A stock price well above the strike price, on a long call let's say, has a delta approaching 1.0 and a stock price well below the strike price, on the same long call, has a delta approaching 0.

To: Berk who wrote (24898)	10/5/1998 10:06:00 PM
From: Jacob Snyder	Respond to of 70976

DW: thanks, again. No, I'm not hedged. All I own is the 2001 call LEAPs. I'm not sure what you mean by "you could pick up premium offset in calls that would expire prior to your LEAPS (called a time spread) which will lose time value". I guess the cynics are right, the market maker makes money whether the stock goes up, down, or sideways. Still, even if everything that can go wrong does, including aki's recession, the semi industry will have to place huge orders for AMAT's equipment before my LEAPs expire, and the stock will be well above 40. From today's price, I'll make nothing till the stock doubles, and from then on I'll make a huge amount of money for every point the stock goes up. At a stock price of about 48, both the stock and my LEAP will have doubled in value. Above that, the LEAP pulls rapidly ahead. Yes, it's a gamble. Yes, the dealer will take his cut. But, at these valuations, it's a gamble where the odds are strongly in my favor.