| OPTIONS PREMIUMS AND CAPITAL INVESTMENTS EVALUATION MODEL | |||||||||||||||||
| Contracts: | 1 | Rate: | 9.30% | SYMB: | AMAT | STOCKNAME: | APPLIED MATERIALS | Price: | $100.44 | MAX Days to Expiry: | 270 | ||||||
| Type: | PUT | Open: | 12/1/99 | TOTAL COST=Number of Contracts X Asked Price + Interest Cost + Commissions | Comm: | $30.00 | MIN Days to Expiry: | 60 | |||||||||
| VALUE RANK | Option Symbol | Strike Price | Contract Expiry | EXIT DAY | BID PRICE | ASKED PRICE | intrinsic VALUE | Time VALUE | Interest Cost | Wasting Cost | Contract Cost | TOTAL COST | BREAK EVEN | Daily Capital | Daily Cost | Daily Total | System Select |
| 1 | +ANQPX | $120.00 | 22-Apr-00 | 03/25/00 | $25.38 | $25.63 | $19.56 | $6.06 | $93.11 | $729.36 | $2,562.50 | $2,685.61 | $93.14 | $17.07 | $6.36 | $69.71 | Best |
| 2 | +ANQPC | $115.00 | 22-Apr-00 | 03/25/00 | $22.00 | $22.25 | $14.56 | $7.69 | $80.85 | $879.60 | $2,225.00 | $2,335.85 | $91.64 | $12.71 | $7.67 | $71.26 | OK |
| 3 | +ANQPB | $110.00 | 22-Apr-00 | 03/25/00 | $18.63 | $18.88 | $9.56 | $9.31 | $68.58 | $1,029.83 | $1,887.50 | $1,986.08 | $90.14 | $8.34 | $8.99 | $72.81 | OK |
| 4 | +ANQPA | $105.00 | 22-Apr-00 | 03/25/00 | $15.75 | $15.88 | $4.56 | $11.31 | $57.68 | $1,218.93 | $1,587.50 | $1,675.18 | $88.25 | $3.98 | $10.64 | $73.63 | OK |
| 5 | +ANQSA | $105.00 | 22-Jul-00 | 06/24/00 | $18.63 | $18.88 | $4.56 | $14.31 | $112.35 | $1,573.60 | $1,887.50 | $2,029.85 | $84.70 | $2.22 | $7.65 | $74.83 | Poor |
| 6 | +ANQSX | $120.00 | 22-Jul-00 | 06/24/00 | $28.25 | $28.38 | $19.56 | $8.81 | $168.89 | $1,080.14 | $2,837.50 | $3,036.39 | $89.64 | $9.51 | $5.25 | $74.87 | Poor |
| 7 | +ANQSB | $110.00 | 22-Jul-00 | 06/24/00 | $21.75 | $21.88 | $9.56 | $12.31 | $130.20 | $1,391.45 | $2,187.50 | $2,347.70 | $86.52 | $4.65 | $6.77 | $75.10 | Poor |
| THIS IS A SAMPLE FOR ILLUSTRATIVE PURPOSES-NOT A RECOMMENDATION | |||||||||||||||||
| VALUE RANK | Option Symbol | Strike Price | Contract Expiry | EXIT DAY | BID PRICE | ASKED PRICE | intrinsic VALUE | Time VALUE | Interest Cost | Wasting Cost | Contract Cost | TOTAL COST | BREAK EVEN | Daily Capital | Daily Cost | Daily Total | System Select |
| Minimums | 6.06 | 57.68 | 729.36 | 1587.50 | 1675.18 | 84.70 | 2.22 | 5.25 | 69.71 | ||||||||
| Medians | 9.31 | 93.11 | 1080.14 | 2187.50 | 2335.85 | 89.64 | 8.34 | 7.65 | 73.63 | ||||||||
| Maximums | 14.31 | 168.89 | 1573.60 | 2837.50 | 3036.39 | 93.14 | 17.07 | 10.64 | 75.10 | ||||||||
| Notes on Calculations: | |||||||||||||||||
| Intrinsic Value is the difference between the Strike Price and the current Price of the stock. This value can be lost if the stock price moves against the option. | |||||||||||||||||
| For out-of-the-money options, Intrinsic Value is negative and is the amount per share by which the option is out-of-the-money (and thus cannot profit by a small move in Price). | |||||||||||||||||
| Time Value is the difference between the Asked Price and the Intrinsic Value. Time Value is also sometimes termed Wasting Value. | |||||||||||||||||
| Interest Cost is the Contract Price multiplied by the daily Rate between the Open and Close dates. | |||||||||||||||||
| Wasting Cost is the Time Value multiplied by the contract size, plus Interest Cost and Commission Cost. | |||||||||||||||||
| Contract Price is the Asked Price multiplied by the contract size. | |||||||||||||||||
| Total Cost is the Contract Price plus Interest Cost and Commission Cost. | |||||||||||||||||
| Even Price is the contract size times the sum of the stock Price and Time Value, plus the Commission Cost, all divided by the contract size. | |||||||||||||||||
| (For out-of-the-money options, the (negative) Intrinsic Value is also subtracted from (added to) the stock Price and Time Value.) | |||||||||||||||||
| This is the stock Price at which this trade will theoretically break even. The actual breakeven point will depend on the option bid price, which also includes (wasting) time value. | |||||||||||||||||
| Capital Daily is the Intrinsic Value divided by the number of days the option will be held (Close Date minus Open Date), multiplied by the contact size. | |||||||||||||||||
| (For out-of-the-money options, the inverse (positive) value of the negative Intrinsic Value is used.) | |||||||||||||||||
| This is a time-sensitive measure of the capital (or profit, for out-of-the-money options) that is at risk to volatility of the stock price. | |||||||||||||||||
| Cost Daily is the Wasting Cost divided by the number of days the option will be held (Close Date minus Open Date). | |||||||||||||||||
| This is a time-sensitive measure of the option time value and trading overhead. | |||||||||||||||||
| For Call options, Total Daily is the sum of Even Price plus Capital Daily and Cost Daily. | |||||||||||||||||
| For Put options, Total Daily is the sum of Even Price minus Capital Daily and Cost Daily. | |||||||||||||||||
| For Call options, Notes identify as "Best" the minimum Total Daily, "OK" the Total Daily values less than the median, and "Poor" the Total Daily values greater than the median. | |||||||||||||||||
| For Put options, Notes identify as "Best" the maximum Total Daily, "OK" the Total Daily values greater than the median, and "Poor" the Total Daily values less than the median. | |||||||||||||||||
| Select the "Best" or a later expiring and lower cost "OK" option as representing a reasonable balance between capital risk, wasting value, and profitable window time. | |||||||||||||||||