Qualcomm Incorporated (QCOM) Message Board

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Technology Stocks : Qualcomm Incorporated (QCOM)

QCOM 175.44

+0.4%

10:24 AM EST

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To: Voltaire who wrote (55077)	12/19/1999 9:49:00 PM
From: Eric Daniels	Read Replies (1) of 152472

Please help me understand your post #55018) <You plan to sell all your qcom in the next 21 days and buy Jan 01 Leeps @450 for $130/sh with 60% of the sale proceeds.> There are three outcomes for Jan 01: Q is above, at, or below $450/sh If Q is above 450 You will have to see the Q at 580 (2/1 leverage created by 60% use of cash from sale (450 + (260/2)) to cover the premium and break even. This will not recoop your taxes paid on gain, if applicable. If Q is at 450 (unlikely) You will lose 60% of your present gain, the price of the calls 260/455. You may gain some from playing the dips, but tax and any timing mistakes can minimize profit & maximize stress. If Q is below 450 Unless it dips below 60% (the amount you invested in the worthless calls) and you buy in with your cash at that time, you will not recoup what you would have had if you just held. In summary, it seems the only scenario that holds potential for gain is the a one year price above 580. Why not just hold the stock through the correction? Regards, Eric

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