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Strategies & Market Trends : Options

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To: Jill who wrote (1905)	1/30/2000 12:58:00 PM
From: waverider	Read Replies (1) of 8096

Q 2001's to 2002's Another question about this kind of exchange. I am doing some analysis in my IRA. I have some DIM 2001's and have focused now on selling them and buying at the money 2002's. So the 2002 $110s go for $45 The 2001 $107s go for $36 This $10 difference appears to be about the same throughout the 2001/02 range. So you are paying about another $10 for another year of life. Not bad from my perspective. Therefore 2002s seem to be a better deal at this point. Now if I sell 10 107's that will net about $36000 If I take that money and try to buy 2002's I would have to go out to $150's at around $35 to be able to buy the same number of LEAPs for the same money. Hmmm... I know this does NOT make sense in my taxable account which is what I was talking about here before. So why would I want to do this in my IRA? Fear of a down or flatline 2000 market...possible...but with the Q, unlikely. So, seems I should stay put. And buy 2002's with new money. Thoughts anyone? Rick

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