How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 508.82

+0.6%

3:59 PM EST

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To: Jean M. Gauthier who wrote (26054)	7/15/1999 11:35:00 AM
From: PMS Witch	Read Replies (2) of 74651

Option prices ... Another observation: Nearing expiration, some deep 'in-the-money' options can not only lose all of their speculative value, the speculative value can become negative as the option trades below its intrinsic value. Fortunately, it doesn't 'go below' very far: And never far enough for arbitrage trading. Microsoft's stock price hits potholes from time to time. When this happens, the option market presents us with very compelling 'fire sale' prices. One profitable approach would be to determine the price you would 'ideally' like to pay for your options and wait until a 'mark-down' day to act. You'd get a favourable price. My belief, and I've posted it before, is that Microsoft will not retreat with any significance from a steady march to $110. At $110, we could see a volatile period where nimble traders will outperform the long term holders. We'll see more opportunities, to both buy and sell, at that time, than now. Hope this helps, PW.

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