Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 168.09

+1.8%

Nov 28 9:30 AM EST

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To: waverider who wrote (52579)	12/5/1999 1:29:00 PM
From: Ibexx	Read Replies (3) of 152472

Diamond Head, The deep-in-the money Q* calls I purchased carry relatively insignificant time premium, that's why I bought them. (Refer to Black Scholes equation ). With Qs near term calls, I intend to exercise the options come January 2000. To answer ZOOB's question: My favorite options play has been out-of-money LEAPS calls on stocks which are steady gainers (made a heap of $$$ with Airtouch/Vodafone and CSCO) where volatility is low and premium relatively reasonable. With volatile stocks, I would switch to short puts to benefit from the rich premium. The Q (near term) calls I purchased were exceptions, as I was still adding to my long position and intend to exercise option rights at the expiration date. Also, in all three instances, Q* was clearly oversold by nervous Nellies and a sharp rebound was inevitable. Never buy out-of-money, near-term calls of highly volatile stocks - such as Dec 400 calls of Q* as advocated by some folks on this thread - if you are investing with serious money. You'd be better off shorting the puts if your broker considers you financially qualified. Ibexx

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