How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 490.06

+0.7%

3:59 PM EST

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To: t2 who wrote (14433)	1/18/1999 9:49:00 AM
From: PMS Witch	of 74651

"What would you expect to get ..." This spread should cost about $2-3 to put in place. Assuming the stock spikes up in anticipation of earnings, you'd be able to close your spread with a profit of about $2, a double. If this much faith is placed in the earnings report, which Friday's $8 rise gives evidence exists, disappointment with the actual numbers will follow, bringing the stock down Wednesday. As the stock price falls, even more people will sell too, overdoing the downside. You may expect to make $4-5 here. Total it up: Spend $3, get $5, spend this $5, get $9. A triple. Happy trading, PW. P.S. Another question you must address: What if things don't go as planned? If this happens: You may lose your $2-3 initial investment; keep the spread and hope for the best before they expire; or worse, see the profit from the spread disappear with the puts as the stock keeps climbing. I hate making round trips.

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