How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 508.82

+0.6%

Nov 11 3:59 PM EST

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To: Jean M. Gauthier who wrote (26535)	7/18/1999 11:10:00 AM
From: Tom Buttram	Read Replies (2) of 74651

Just how much msft stock does a person need to retire?Assuming you need 50k per year to live on and assuming you never want to sell your principle shares.Lets assume you have 5000 shares today($500,000.)Would it be prudent to use options for income?Sell slightly out of the money puts when msft is an obvious buy(76-80 recently).If assigned thats ok, just wait for a rebound and then sell covered calls.And when msft gets overbougt sell short term out of the money covered calls on a portion of your priciple shares.I know cc can be hazardous if the stock continues upward but you can always cover and roll up .I think this is called a strangle in options.I just did this with intc recently sold atm oct 55 put,sold otm aug 75 call and so far workind great.Received nice premiums on both ends and probably will not be called or assigned.It makes sense to put to work such a large principle amount(msft stock) to derive income.Thanks for all the good discusion lately. Tom ps also assume you can use 10% margin to buy msft if needed

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