Jill, Sorry for not getting back to you earlier regarding your question on QCOM and MSFT options.
I have not bought any at this point. Instead, I decided to go fully invested in shares a few days ago.
QCOM options probably have a much higher risk if you look out to at least January. Of course, the potential gains on Q could be huge. It is just a matter of risk/reward.
However, MSFT options have great potential with less risk, IMHO. I am just waiting for a bit of a general market selloff before buying calls. I expect the selling to start later this week but it may not last. It just appears that individual investors are not bailing out of the market and those hedge funds (and mutual funds raising cash) end up buying the shares again at higher prices. Will they do it again? My guess is yes but if this fails to cause redemptions from mutual funds (and stock selling among retail investors), we could be on the move up again very quickly.
I am just waiting for the opportunity for January 2000 to March 2000 options for the maximum gain on an explosive move in the stock. Going out to 2001, you are not taking as big a risk. I prefer January 90 to 100 for now. However, i am not really sure of what strike prices i will settle upon.
I am getting ready to sell some QCOM ahead of a possible selloff---just a defensive move. Right now---QCOM, MSFT, INTEL, DELL (Q and MSFT the larger ones)are my only major stock holdings. Have some small internet holdings like Amazon. If we do get a selloff, it will be a great time for out of the money call options on MSFT.
As you can tell from my post, i am very undecided. It really all depends upon how the market behaves. If it rallies, no point in buying calls. |
