Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Labrador who wrote (26052)	4/4/1999 9:29:00 PM
From: Ruffian	Respond to of 152472

Click on options next to the Q> search.tscn.com

To: Labrador who wrote (26052)	4/5/1999 11:34:00 AM
From: Jon Koplik	Respond to of 152472

Mathematics of early put option exercises. (Warning -- this is stuff I learned in business school, but -- it DOES actually apply to the "real world.") Put = Call - StockPrice + PV(ExercisePrice) Call = Put + StockPrice - PV(ExercisePrice) (PV means present value or ... e ^ (-rT), in case you want to be reminded how glad you are NOT to be in school right now) If you work out an example of a deep in the money put, the above calculation will yield a put value that is below the value that can be realized immediately if one exercises the put option as soon as possible. Moral of the story - ALL deep in the money (American, NOT European style) put options will be exercised early, unless you are lucky enough to have a moron on the other side of your transaction. American options can be exercised any time during the life of the option. European options can ONLY be exercised on the last day of the life of the option. Jon.