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Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: bertrand bidaud who wrote (167)	11/1/1998 1:16:00 PM
From: Kevin Podsiadlik	Read Replies (1) \| Respond to of 3891

The YDI options are DSC Communications options, which represent 80.5 shares of ALA instead of the usual 100. So that Jan 20 option YDIAD actually has an effective strike price of a bit under 25 (24.84 by my calculator), and that is why their price is so low.

To: bertrand bidaud who wrote (167)	11/2/1998 8:47:00 AM
From: Steve Becker	Read Replies (1) \| Respond to of 3891

I had DIGI options converted to YDI. I got details faxed from my broker firm's clearing house because none of the brokers knew how to interpret the contract adjustment. The new contract is “81 ALA shares and cash in lieu of .5 ALA shares. The underlying price of YDI, YLI and YZS is as follows: YDI = .81(ALA) + cash in lieu of .5 ALA shares, rounded to the nearest sixteenth. For example, if ALA closes at 40 (this was obviously written before September 17th), and the cash in lieu amount is $20, the YDI price would be: YDI = .81(40) + .20 = 32.60 = 32 5/8 rounded. In this example a YDI 30 Call would be $262.50 in the money (difference of deliverable value of $3262.50 and the strike price amount of 30 x 100 = $3000). A premium of 2 5/8 would yield this amount: 2 5/8 x 100 = $262.50.” I understood it after the fourth time I read it. The $20 comes from $40 x .5 Steve