Ampex Corp: Digital Storage Message Board

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Technology Stocks : Ampex Corp: Digital Storage

AMPX 10.56

-14.8%

3:59 PM EST

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To: Doug Prager who wrote (343)	9/29/1996 12:41:00 AM
From: Kannan Ramaswamy	of 3256

Here is one play you could do: Assuming that AXC holds its present pattern of 7 - 8 trading range .. Let's say you are long on AXC with a 1000 shares. Buy 10 contracts of the Jan 7 1/2 position at the next dip down to low 7 around (1 - 1 1/4). (This is to ensure that you won't be left out of a market surge upwards). Each time AXC hits 7 7/8 - 8 sell 10 contracts of the 7 1/2 call to the next 30 - 45 day expiration. Buy it back as the stock drops to low 7. The key to the play is selling an in-the-money call with intrinsic value and buying back the option out-of-the money with little time premium left! Hope this makes sense! A simpler alternative .. Buy the Jan 7 1/2 call. Play the stock position ... sell the stock near the high 7s and buy it back at the low 7s. In both scenarios you are covered with the Jan 7 1/2 long position in the event that the stock should move past the 8 1/4 resistance level. Good Luck! KR.

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