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To: Chuzzlewit who wrote (89878)1/19/1999 2:12:00 PM
From: BGR  Respond to of 176387
 
CTC,

Technically speaking, fairly-valued options adjusted for risk decay with time at a rate matching the risk free interest rate but so do stocks when adjusted for risk, as you might have gained risk-free interest rate if you had put your money in T Bills instead. Geoff, you and I had a discussion on this issue in December. Surely limited life span means that options cannot be held indefinitely but 1) they can be exercised at expiration thus continuing the life span and 2) I think you are defining buy-and-hold too narrowly if the holding period has to be strictly indefinite. For me, long enough is good enough but that is a subjective choice which may not be debated IMO.

-Apratim.