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Politics : Formerly About Applied Materials

AMAT 297.52

-6.6%

3:59 PM EST

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To: Gottfried who wrote (32761)	10/8/1999 12:44:00 AM
From: Jerome	Read Replies (2) of 70976

"He sold the Jan 25 puts" This was a method of raising cash off of his portfolio. My Fidelity stock screen indicates that the Jan. 25 puts traded today at 0 by 3/16. times. From this he netted .1875 times 100 times 2000 or $37,500 It was a risk free transaction. AMAT has almost no chance of reaching 25 by Jan. short of some catastrophic event. His other transaction was to buy 400 Jan. 45 puts and todays price was 7/16 by 9/16. So these contracts cost him about $20,000. (I used a purchase price of 1/2 times 400) These puts will appreciate in value if AMAT drops to the 65 to 70 dollar range. If AMAT's price drops about 10 points both positions will turn out profitably. As the price of AMAT drops he could close out both positions simultaneously or individually as he saw fit. It could have been a mutual fund trying to generate cash from a portfolio. In neither case does he want the price to reach those levels. He just wants the price of AMAT to go lower for a month or two. This my interpretation of these transactions. I'm open to a better reading if someone cares to try. Jerome

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