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Technology Stocks : Intel Strategy for Achieving Wealth and Off Topic
INTC 36.78+2.7%Nov 26 3:59 PM EST
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To: Sonny McWilliams who wrote (24158)8/3/1999 1:00:00 AM
From: Brian Malloy  Read Replies (1) of 27012
 
Sonny,

Not sure if we are missing each other's points here. I'll try to rephrase. This is a transaction based on stock that one would own. It's not going out into the market and simply buying call options and then decide when to sell and or possibly take delivery of shares. The basic idea, if one wanted to get T then do it by buying UMG and get a 10-15% discount. For those that just want to make a trade for profit you

BUY the UMG stock say at $73

Now that you own the stock you can Sell a Covered Call and pocket the premium up front, say $2 for the Jan 2000 UMG @85. Since you already know that you plan to release the stock at $85, the covered call premium is basically free money.

One would like for the stock to be called away when the deal is done or one would simply sell the T shares once the takeover is complete.

Potential profit
$2 for writing a Covered Call, or could simply choose not to do this
$12 When the stock gets called away ($85-$73)
$14 Total

19% Profit ($14/$73) for a four to six month holding period with relatively low risk to principle

Of course one could buy UMG on Margin and leverage these numbers.
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