3Com Corporation (COMS) Message Board

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Technology Stocks : 3Com Corporation (COMS)

COMS 0.00130

-18.8%

Nov 7 11:47 AM EST

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To: Carmine Cammarosano who wrote (10687)	11/21/1997 9:04:00 PM
From: Glenn D. Rudolph	of 45548

It seems to me that you do not have to close your puts on 3COM yet...and if they put it to you then you can sell you shares for a lost at that time, if you have to...I think with a little more upward movement on the stock, you should be able to roll the puts out and down in strike price for a credit...buying the puts back can be a mistake because you are paying for a time premium, unless, of course you think 3COM will sink...3COM's action this week tells me the worst is behind it...of course no one knows for sure...the news(earnings cut) did not hurt the stock...whenever I see a stock act well with bad news, I am very encouraged...also, lower expectations for future earnings is alway welcomed...in the long run(Spring time) this will pay off big time...hang in there.... Carmine, There are two factors here. Deep in the money puts have no time premium. Closing deep in the money puts and writing new puts not deep in the money brings in time premium. This does limit upside. The second factor is equity. The drop of 40% in both COMS and ASND which are my largest positions, eventualy forced margin calls I could no longer cover. I had to lighten up. I wrte the puts knowing I could cover a substantial drop in one or the other. Both at the same time and that hugh percentage was a bit much. You optimism is well taken. I do agree. Unfortunatlly, I will not be going up with as many shares with which I fell. The only way to do that is to buy calls and one needs to have perfect timing for that and one does pay a premium for that. I will stay long a relatively large position in COMS. I have not lost confidence. Glenn

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