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To: DownSouth who wrote (3710)	7/20/2000 5:13:19 AM
From: Sam Salomon	of 10929

Calculating unconventionally premiums for 03' Leaps 70 calls for NTAP I come to the following results: NTAP closed around 100 yesterday. Assuming interest rate of 7% p.a. if I buy NTAP cash at this price I forgo about $17.5 in interest (not counting compound interest) until Jan 03, so my cost is about $ 117.5. If I buy the deepest ITM 2003 calls, the 70 calls at around 60 I forgo around $10.5 interest until Jan 03 so my cost is around $ 70.5. If I exercise in Jan 03 total cost of NTAP is $ 140.5 for a premium of 19.5 % or about 7 - 8 % per year. Is this a calculation that in your opinion - is basically correct? - if yes, should it have any relevance on the LEAPS decision (in other words do you expect NTAPs price in 2003 to be so different from today's that 7 -8 % p.a. is not relevant)? Added points: 1. If you use ATM or OTM calls the premium percentage becomes larger. 2. Assume NTAP tanks while the LEAPS still have a long time to run. LEAPS may tank somewhat less in absolute dollars (more percentagewise) immediately after a steep fall of NTAP. You could then switch back to the equivalent amount of common thus reducing your loss, IF you have the cash to pay for the common. Regards Sam