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<DIV><FONT color=#000000 size=2>am sorry but the cash price of the share is
relevant to the option price</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT><FONT size=2>the example just doesnt make
sense for the call to be so expensive it must be in the money or a long maturity
likewise for the put to be so cheap</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>kohath <<A
href="mailto:kohath@xxxxxxxxxxxxx";>kohath@xxxxxxxxxxxxx</A>><BR><B>To:
</B>Ira Tunik <ist@xxxxxx><BR><B>Cc:
</B>realtraders@xxxxxxxxxxxx
<<A
href="mailto:realtraders@xxxxxxxxxxxx";>realtraders@xxxxxxxxxxxx</A>><BR><B>Date:
</B>Friday, August 13, 1999 7:49 PM<BR><B>Subject: </B>Re: Amzn Call/Put 100
Strike<BR><BR></DIV></FONT>
<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 $10.50.As can be seen, same strike, same time
frame. This is whyselling is more profitable than buying, but,
selling involvesmuch higher risk. These two charts also show
the marketmakers have a distinct advantage because of the
meltingvalue of the options.Now if we had only sold 100 contracts of
the YZZHT on July 16th!Kohath <IMG alt="" border=0
src="cid:01ac01bee5b8$d73265a0$50e22ec3@xxxxxxx";></BLOCKQUOTE></BLOCKQUOTE></BLOCKQUOTE></BODY></HTML>
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