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Technology Stocks : S3 (Multimedia semi's place 2be)
SIII 0.00010000.0%May 12 5:00 PM EST
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To: RAY WACLAWSKY who wrote (6891)1/17/1997 7:14:00 PM
From: rajesh   of 9477
 
RAY: It is my personal opinion that you should not have exercised your options today. Let me see if I can reason it out.

If you really think (as we all do) that S3 will rise on the day of the earning, you should have bought when the stock was below 17.5, in fact when it was below 17. In that case you should have just held your options and, instead of exercising them, you should have just sold them off as a closing transaction. That way, you would not have had excess stock on hand. See it this way. If 17.5 is a good price to buy, below 17 was definitely a better price.

The above strategy basically ensures that the maximum price you pay for the stock is below 17.5.

Let me know if there is a flaw in my reasoning.

By the way, I had written 10 contracts at 5/8 for Jan 17.5. I had bought these 1000 shares at 16.75 (apart from my core holdings) couple of weeks ago. So, it is in my best interest that not many people exercised their options today or earlier. I will find out on Monday.

Rajesh Agarwal.
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