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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (35318)	11/5/1998 11:47:00 AM
From: epicure	Read Replies (1) \| Respond to of 132070

General question on options- MB I have noticed a certain irrationality in the pricing of options- take PAIR for example- on the way down from the teens leaps on PAir at 20 could be bought for about 1 1/4 when it was at ~12. Then it dipped down into the single digits, the leaps got as low as 3/16 - on the way back up the leaps were worth 1 1/4 in the 11's- went up to 2 in the 12's then the option makers suddenly re-priced and the price did not go back up to 2 again until it got into the 13's (which was still high relative to where the price was on the way down). My question relates to the rather erratic nature of the option prices- what kind of calculator are the option makers using? Is this a soft science with a lot of subjectivity in it? I am sure we have all noticed that when rapid changes in the price of the underlying stock occur inefficiencies develop in the option price- these are usually quickly corrected- but if you can exploit them they can be very profitable. I figured you might know a good reference on option pricing- I am interested in learning about it from the Market Makers side.

To: Knighty Tin who wrote (35318)	11/5/1998 2:19:00 PM
From: James H	Read Replies (1) \| Respond to of 132070

Agreed. Any idea if they will actually make some money down the line? I think I'll pick it up if it dips back below 6. Otherwise I'll wait for some earnings and hope to get in before it doubles(g). Thanks, Jim

To: Knighty Tin who wrote (35318)	11/5/1998 2:22:00 PM
From: Merritt	Read Replies (1) \| Respond to of 132070

MB: GEMS: << I think it is decent for a spec here, but Asia has certainly creamed the fundamentals. >> Did you read the article "Testing Times for the Tigers' Telecoms" in this week's Economist? Considering the economic troubles, they've done remarkably well. Mobile phones in particular. "In the affluent city-states of Hong Kong and Singapore nearly 40% of people now have mobile phones, the highest penetration in the world outside of Scandinavia." Perhaps that's why GEMS beat estimates by a nickle this past 3Q. Now that they're cutting their workforce 10%, profits should get better (excluding charges, of course). I think I just talked myself into nibbling here.<G> Best regards, Merritt