Ramsync Brief

1. In financial field, an option is a financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to buy (call) or sell (put) a security or other financial asset at an agreed-upon price (the strike price) during a certain period of time or on a specific date (exercise date).

2. Stock price and exercise price, time to maturity and volatility all affect call price.

3. An option’s intrinsic value is the in-the-money portion of the option's premium; it is the difference between the underlying stock's price and the strike price. Time value is the portion of the option premium that is attributable to the amount of time remaining until the expiration of the option contract; it is the value the option has in addition to its intrinsic value.

Call Option Prices Put Option Prices

Expiration Date Expiration Date

Strike Price Jun’04 Sep’04 Dec’04 Strike Price Jun’04 Sep’04 Dec’04

$20.00 5.88 7.16 8.23 $20.00 0.04 1.01 1.79

$22.50 3.61 5.53 6.80 $22.50 0.26 1.84 2.78

$25.00 1.85 4.20 5.59 $25.00 0.99 2.96 3.99

$27.50 0.77 3.14 4.58 $27.50 2.41 4.36 5.40

$30.00 0.26 2.32 3.74 $30.00 4.39 6.00 6.98

Intrinsic Value Option

$20.00 5.79 5.79 5.79 $20.00 0 0 0

$22.50 3.29 3.29 3.29 $22.50 0 0 0

$25.00 0.79 0.79 0.79 $25.00 0 0 0

$27.50 0 0 0 $27.50 1.71 1.71 1.71

$30.00 0 0 0 $30.00 4.21 4.21 4.21

Time Value Option

$20.00 0.09 1.37 2.44 $20.00 0.04 1.01 1.79

$22.50 0.32 2.24 3.51 $22.50 0.26 1.84 2.78

$25.00 1.06 3.41 4.80 $25.00 0.99 2.96 3.99

$27.50 0.77 3.14 4.58 $27.50 0.70 2.65 3.69

$30.00 0.26 2.32 3.74 $30.00 0.18 1.79 2.77

The time value gets larger as the time to maturity increases. In-the-money options have the greatest intrinsic value and at-the-money options have the greatest time value.

4. The MRAM growth option is comparable to a financial option in this...