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<DIV>The point here is, the call went from 40 to 2.5, a 1600% decrease in price,
</DIV>
<DIV>the Put went from 1.5 to 10.5, a 700% increase in price. What I was
pointing</DIV>
<DIV>out was that, as a market maker, had I sold you 1 call at 40 and 1 put at
1.5,</DIV>
<DIV>I would still be ahead 40 - 2.5 = 37.5, 1.5 - 10.5 = 9, 37.5 - 9 =
28.5. So, </DIV>
<DIV>I would have a 28.5 X 100 = $2,850 profit for each of a call/put
combination sold.</DIV>
<DIV>That is why I said the price of the stock is irrelevant. Yes, the
stock dropped</DIV>
<DIV>significantly, but, look what the options did. Yes, there is more to
being a </DIV>
<DIV>market maker than this simple illustration, but, there is a distinct
advantage</DIV>
<DIV>to selling verses buying.</DIV>
<DIV>Kohath</DIV>
<DIV> </DIV>
<DIV style="FONT: 10pt arial">----- Original Message -----
<DIV style="BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A
href="mailto:ist@xxxxxx"; title=ist@xxxxxx>Ira Tunik</A> </DIV>
<DIV><B>To:</B> <A href="mailto:kohath@xxxxxxxxxxxxx";
title=kohath@xxxxxxxxxxxxx>kohath</A> </DIV>
<DIV><B>Cc:</B> <A href="mailto:realtraders@xxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxx>realtraders@xxxxxxxxxxxx</A> </DIV>
<DIV><B>Sent:</B> Friday, August 13, 1999 11:04 AM</DIV>
<DIV><B>Subject:</B> Re: Amzn Call/Put 100 Strike</DIV></DIV>
<DIV><BR></DIV>If you feel that the stock price is irrelevant, I'll take the
other side of your trades all day long. The conversion reversal
would have kept the puts and calls in direct relationship to one another.
It looks to me like the calls started in the money and then ran out. Half
a truth doesn't prove that you are right. Ira. <BR>kohath wrote:
<BLOCKQUOTE TYPE="CITE"> It's irrelevant where the stock was then and
where it is now. The point is,Selling always brings in a higher
percentage than buying, always! Becauseof the melting value of options,
but, with selling there is limited profit withunlimited risk!Kohath
<DIV style="FONT: 10pt arial">----- Original Message -----
<DIV style="BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A
href="mailto:ist@xxxxxx"; title=ist@xxxxxx>Ira Tunik</A></DIV><B>To:</B> <A
href="mailto:kohath@xxxxxxxxxxxxx";
title=kohath@xxxxxxxxxxxxx>kohath</A><B>Cc:</B> <A
href="mailto:realtraders@xxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxx>realtraders@xxxxxxxxxxxx</A><B>Sent:</B>
Friday, August 13, 1999 10:40 AM<B>Subject:</B> Re: Amzn Call/Put 100
Strike</DIV> You left out one very important fact. Where was the stock at
point one and at point 2 in your example. Why don't you post the stock chart
too? Ira.
<BLOCKQUOTE TYPE="CITE">
<STYLE></STYLE>
Charts of AMZN 100, Call, Put.Call went from $40 to $2.50, put went from
$1.50 to $10.50.As can be seen, same strike, same time frame. This is
whyselling is more profitable than buying, but, selling involvesmuch higher
risk. These two charts also show the marketmakers have a distinct
advantage because of the meltingvalue of the options.Now if we had only sold
100 contracts of the YZZHT on July 16th!Kohath <IMG alt="" border=0
src="cid:019b01bee5ad$76653640$a54a03cf@xxxxxxxxxxxx";></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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