Thanks for your help in assuring that everyone is aware of this.  I really 
appreciate it.




Larry May@ENRON
02/15/2001 01:16 PM
To: John J Lavorato/Enron@EnronXGate, John Disturnal/CAL/ECT@ECT, Louise 
Kitchen/HOU/ECT@ECT, John Arnold/HOU/ECT@ECT, Hunter S Shively/HOU/ECT@ECT, 
Sally Beck/HOU/ECT@ECT, Phillip K Allen/HOU/ECT@ECT, Peter F 
Keavey/HOU/ECT@ECT, Scott Neal/HOU/ECT@ECT, Susan M Scott/HOU/ECT@ECT, 
Jeffrey C Gossett/HOU/ECT@ECT, Shouan Tang/Enron@EnronXGate
cc:  
Subject: re: Gas Daily options revaluation

This is to inform you that we are rolling out changes to the Gas Daily option 
pricing model.  Currently the system is not properly pricing index puts and 
calls at locations with gas daily index premiums or discounts (puts and calls 
are priced at the same level no matter what the index).  The change will 
result in raising call values/lowering put values at locations with index 
premiums and the opposite at locations with index discounts.

In addition, index plus/minus option deals (for example index -1.00 puts) - 
which are currently incorrectly priced flat to the index option (the index 
-1.00 put is priced flat to the index put)- will be accurately priced to 
reflect the difference in strikes.

If  anyone has any questions please call me at  3-6731.

Thank You,

Larry May