Novell (NOVL) dirt cheap, good buy? Message Board

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Technology Stocks : Novell (NOVL) dirt cheap, good buy?

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To: Paul Fiondella who wrote (11024)	4/10/1997 8:13:00 PM
From: E_K_S	of 42771

Hi Paul - The option strike prices I was thinking of would be the $12 1/2 or $15 calls but at a target month of August or November 1997. I would try to sell these when the stock made another run to $11 5/8 - $12 3/8. Today's preminum for the Aug $12 1/2 was 1/2; Aug $15 was 1/4; Nov $12 1/2 was 3/4 and Nov $15 was 3/8. On a run up in the stock in the next two weeks toward $11 5/8, I expect the preminums for the above to be: Aug $12 1/2 $ 1 1/8 - $ 1 3/8; Aug $15 3/4 - 1; Nov $12 1/2 $ 1 1/2-$1 5/8 and Nov $15 3/4-7/8. I do not expect Novell to really be impacted by what the Fed does and the overall economic situation EXCEPT if the dollar get much stronger relative to other currencies. I am leaning to the Aug $12 1/2 calls at $1.00 or November $15 calls for $7/8. What I am trying to anticipate is if we get another run up on Novell with CEO Schmidts announcements and plans, I want to establish a covered call position to lock in all preminum so I generate income while we "pray" for the results. If you can lock in about a $1.00 preminum (for August four months and for November six months), this would represent a significant return on your equity while you wait. Comments? EKS

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