Ascend Communications (ASND) Message Board

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Technology Stocks : Ascend Communications (ASND)

ASND 213.30

0.0%

Jan 2 3:59 PM EST

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To: Gary Korn who wrote (14038)	9/23/1997 11:24:00 AM
From: Glenn D. Rudolph	of 61433

Aha, but Glenn would say (I think) that this is a synthetic put. If I were to write a Jan '99 45 put now I would get 13.62 times my stake. That is less gain than on the synthetic put, but it ties up no money in the underlying stock itself. Hmmm...This looks good, doesn't it? Then again, there is the Jan '99 60 put at 24.62. Heck, if the stock closed at 36 by then it would be a break even. Hmmm... Gary, You mentioned my initial answer during the second to last paragraph. Let's assume (you know what is said about assuming) that ASND will bounce the day prior to earnings. Most stocks seem to do that. COMS comes to mind thus far today. One may assume you own shares now but being superstitious I would only guess<G> Here is a thought. Sell half the shares you have close to close of market the day prior to earnings. Sell and equivalent number of naked LEAP puts contracts so you do not increas exposure to the stock. Sell convered LEAP calls for your remaining shares. You are looking at January of 99 so this strangle could have a large price swing range. The puts can be at a strike of 40 and the calls of 70. You receive premium from both and have not added any further risk. You also also increased your upside to more than 90 without having to pay to close the calls if ASND runs. The pust premium will work in your behalf if ASND rises which I suspect to occur. The call premium works in your favor in the event it does not rise as much as anticipated but you also keep the put premium. I did not look up the premiums for these LEAPS so consider this theoretical numbers but I suspect they are very close. Besides, ASND is not at the price that it could be the day prior to expiration. Glenn

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