CMGI What is the latest news on this stock? Message Board

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Technology Stocks : CMGI What is the latest news on this stock?

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To: Stockjet who wrote (14403)	11/29/1999 12:59:00 PM
From: JavaGuy	Read Replies (1) of 19700

Stockjet, I learned a while back, that covered call writing in this stock has to be done with care. I am feeling the pain in SUNW. Had to bite the bullet and roll out to higher strikes. Sometimes the stock is just too strong. I am currently looking at the leaps. You can buy the stock and write the leaps (sell a put and a call) practically guaranteeing yourself a >50% return next year. (Unless CMGI really tanks) The recent run up has given us great option premiums. For simplicity, I'll, round... buy 100 CMGI @ 160 ($16000) sell 1 Jan '01 160 call @ 50 $5000 sell 1 Jan '01 160 put @ 50 $5000 net cost ($6000) Stock will most likely get called @ 160 $16000 minus cost ($6000) net gain $10,000 on only $6000 capital at risk. The only snaggs are the margin requirement tie up for naked puts. and the event you may get put the stock at 160 in Jan '01 (not likely). I'll probably do this this week and leave my core CMGI alone. To Me, this is actually more conservative than just buy and hold, 'cause CMGI could well be $300 next year....you may be limiting your gains. Cheers, JG

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