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Technology Stocks : Qualcomm Incorporated (QCOM)
QCOM 174.18+1.1%Dec 18 3:59 PM EST

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To: Uncle Frank who wrote (55159)12/20/1999 10:58:00 AM
From: codawg  Read Replies (1) of 152472
 
Actually Frank, I think your post proves MMs point. There is no difference in the Black-Scholes model for "options" vs. "leaps". They're the same thing with leaps converting to options at the arbitrary limit of one year. You just plug in a larger number for t and probably for r if your using leaps.

However, your point is well taken that there is less risk in a long term option than a short term one. If I weren't having so much fun holding and rolling up short termers on Q I'd probably be holding leaps myself.

I think yours and Voltaire's strategy is a sound one. Not sure why everyone trying to compute returns on Voltaire's method stops calculating at $570 when it is above this number where the strategy pays off. And we all know Q will be well above this level in 13 months <g>.

Co
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