Re: Consequences of breaking RSA, AES

From: Bryan Olson (
Date: 05/09/03

Date: Fri, 09 May 2003 12:12:45 GMT

Mok-Kong Shen wrote:
> Louis Scheffer wrote:
>>Mok-Kong Shen <> writes:
>>>If I understand your last sentence correctly, there
>>>is a general way of getting rich thru buying options,
>>>for one wins thereby regardless of the direction the
>>>stock moves. That would be marvelous. Could you please
>>>elaborate that some more?
>>Yes, it's possible, but the idea works only if the variations are large.
>>If the price does not change much, you lose money.
>>Suppose a stock is selling at $20. For a few
>>dollars/share you can by the right (but not the obligation) to buy shares
>>a few months from now at $20/share. For this example let's make the cost
>>$2/share though it varies due to market conditions. (The seller is
>>expecting that the price will not increase, and he can pocket the
>>and keep his shares). Likewise you can buy the right, but not the
>>to sell shares a few months from now for price of $20, from someone who
>>thinks the price will go up. Now if the price varies a lot, one of these
>>two will become valuable, and the other worthless.
>>The downside is that if the price does not vary by more than $4,
you've lost
> One terms the one 'put' and the other 'call' option.
> Now you as investor has to decide whether you do put
> or call. If you speculate on the one kind of options
> and the market goes in the other direction, you'll
> certainly lose. Or am I missing something?

You are missing a few minutes of thought. Louis Scheffer has
given you all you need to know. Re-read his post carefully.


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