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Strategies & Market Trends : Gorilla and King Portfolio Candidates

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To: Wyätt Gwyön who wrote (5622)	8/31/1999 12:37:00 AM
From: The Reaper	Read Replies (1) of 54805

G. Man-- Follow me on this one.. Buy 1000 RMBS @100 on 60% margin. Cash needed = $60K margin debt = $40K margin cost for 2 1/4 yrs. = $8K Sell 10 RMBS JAN 2002 100 LEAPS @50 Cash received = $50K Take that $50K out of account so actual cash outlay is $10K. By JAN 2002 stock is at 100 or above.. stock is called away you receive $100K for sale of 1000 RMBS, pay broker $40K plus $8K interest for total proceeds of $52K. So..... $10K ------> $52K in 2 1/4 yrs. Just a bit more than your example of 50%/yr. if done with all cash. Breakeven is RMBS at $58/share in JAN 2002. Do this transaction at 4 or 5 different brokers and you're talking some serious coin for your money with the stock going nowhere. Think it'll work? kirby

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