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So decide not to go by myself.

9:00 Watch "Tracey Ulman." Boring.

9:30 Watch Cross Creek.

About a writer + drinker.

Write what I know about.

Bob calls. Ric U in hospital with ARC.

Watch some good parts of Cross Creek over again.

12:30 Go to bed

Mon Oct 26 '87

7:45 Get up. Misc. Dow down 110.

Microsoft at 39.

Whoa is me.

Take a walk; cold wo/scarf. Turn back.

Maybe I dont need to worry about these prices. They're all fair prices.

Especially since I don't need the money in excess of $1M.

OR maybe I should buy tons of options and make a small killing.

Read WSJ. Comparisons to Oct '29 technically very similar.

From MS Options, it looks like puts are more expensive than calls.

9:45 Call for quote

MS 37 1/2

CALL MSQAH 7 3/4 (strike at 40)

PUT MSQAH 7 1/2 (strike at 40)

A call for the right to buy at 40 includes 2 1/2 excess over 37 1/2 so the premium is 10. A put to sell it at 40 has a premium of 5.

So calls are more expensive than puts.

Another way to look at this.

- To make money on a $40 call, the price must rise to 47 3/4, which is 10 points above where it is now, so thta's a premium of $10/sh or about 25% for 3 months.

- To make money on a $40 put, the price must decline to 32 1/2, so that I could buy it there + sell for $40. So that's a $5/sh premium. Or about 12% for 3 months.

10:15 Look at Mutual Fund Forecaster. They said in Oct issue stocks will be up 21%