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Technology Stocks : TAVA Technologies (TAVA-NASDAQ) -- Ignore unavailable to you. Want to Upgrade?

To: Tim J. Flick who wrote (27380)	2/3/1999 12:06:00 AM
From: Karl Drobnic	Read Replies (1) \| Respond to of 31646

Specialists are asking $.75 for the TAVA Feb. $7.50 call. That's an implied volatility of 113% with 18 days to go to expiry. Looks like they want to be highly-paid for the risk of writing someone an 18-day call option. (I'm not suggesting anyone pay $.75 for the call. It will decay very fast at 113% implied volatility. I'm pointing out that option specialists see a lot of risk in being short the Feb. $7.50 call, and the price implies that TAVA is headed north of $7.50 in the next couple weeks. Viewed another way, $.75 premium on a $7.50 stock for an 18-day call represents a 202% annual yield to the specialist if the call expires worthless - meaning it's highly risky to bet that TAVA will be less than $7.50 18 days from now.)