Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Bilow who wrote (77902)	10/30/1999 3:41:00 AM
From: RDM	Read Replies (2) of 1576845

<"synthetic long" position> I find the name interesting but I don't understand the origin. I simply bought a call financed by a put. The strike prices of both options are slight over the current price. The put revenue more than funded the call by a small amount. Specifically, the call cost 7/8 and the put yielded 1 1/16. Whether it is wise or not remains to be seen by the November expiration date in approximately two weeks. I think of it as a "hail mary long" rather than synthetic. If AMD is more than 21 1/16 on the expiration date I earn more than if I just wrote a put. The upside is unlimited. If AMD is 25 I make almost five times the put sale. If AMD is between 20 and 21 then I make less than the put sale alone would have yielded. If AMD, perish the thought, closes less than 20 then I add some more AMD shares to my portfolio at 18 7/8 basis and declare a 7/8 per share loss on this years return. I find this attractive since I would not mind even acquiring more AMD at 20 even if that should happen and I have a shot a fair piece of change "should the well hit". There more than opinion about the wisdom of this but thats what makes a horse race! I will buy Elmer a beer if I hit.

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