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Technology Stocks : JDS Uniphase (JDSU)
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To: ggamer who wrote (7198)3/7/2000 2:42:00 PM
From: t2  Read Replies (1) of 24042
 
ggamer, RE: June options on JDSU.
This is a tough one. You are now basically holding the equivalent of JDSU stock on margin by holding these June calls. It really depends upon how much risk you are willing to take and how concentrated you are in JDSU.

One thing that you are clear of is the possibility of deteriorating premiums (with time) since your calls are deep in the money.

You decision is basically dependent on where you feel JDSU is headed. I wish I knew although I think the trend is to higher levels. I am expecting a split announcement by the April earnings but we could have a lot of volatility from now to April and more to June. It never hurts to take some profits on the calls and ride the rest especially if you already made some great gains.

I feel JDSU will be a lot higher by the June expiration but as you know there are no guarantees. Again, the good thing is that you don't have much premium left on your options.

Another way to play it is to sell all your deep in the money calls and buy out of the money calls but use only a fraction of the capital. You could buy the same number of contracts but with much less cash. This is like profit taking but with the potential of some big gains on your new out of the money calls.

Any way you look at it, it is a tough decision.

good luck
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