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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (21574)	4/26/1999 10:06:00 AM
From: nihil	Read Replies (2) \| Respond to of 74651

These are not exchange traded options but are contracts between MSFT and the buyer. They could be European-style options or exotic flavors. The ability to settle for net stock means that MSFT can pay off in stock at market price using unissued but authorized shares which the put owners could then sell. Thus there is no real possibility that the sale of puts could cause any cash inconvenience for MSFT. These puts sales are a way of letting the hypercautious pay handsomely for their caution.