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Strategies & Market Trends : Option GEMS - Hot Options in Booming Companies...

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To: Jenna2 who wrote (3)7/26/1997 5:55:00 AM
From: John Liu   of 396
 
Checked into DDIM before and would not recommend it for any kind of call plays since it is in an "industry"(Year 2000) that has not really yet shown a way to make much profit. Last time I investigated the industry most of the other major players stock price has fallen by alot, DDIM was one of the few that has not. The company is very liberal about sending out report that are not very important so put plays are also pretty dangerous for short term options. Recently it has began trading downward but still has a P/E of close to 200.

Currently looking into plays that involve companies that have large percentage of shorts. This strategy is risky and volitile but also has very large chance of enormous returns because of the fact of shorts covering. What do you think of this strategy?

Currently involved with two options: APM(Large short position, over 45% short, low P/E under 8) and HERB (beaten down/great earnings announcement recently)

I would recommend for APM October 35 since hopefully by then next earnings would be out and technology question would be resolved. For Herb I would recommend the December 22 1/2 that has a premium of under $2. This one most likely would rise slowly but steadily after the profit taking.

Good Luck,
John
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