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Technology Stocks : Xilinx (XLNX)

XLNX 194.92

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Feb 14 4:00 PM EST

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To: hpeace who wrote (1198)	5/10/1997 1:31:00 PM
From: Thomas G. Busillo	of 3291

Steve, I agree with what you're saying in theory, but what if you did the exact opposite... Instead of trying to set up a strangle entering with a long put on rallies and long call on weakness before earnings, what if you entered after earnings with...wait a second, what I'm thinking of is incredibly stupid... Scratch that thought...no wait a second..what if you wrote the contracts after earnings and got a short strangle...no... I apologize for thinking out loud here, but I think where I'm getting lost is trying to milk out as much as possible from the premium playing both sides...that and the fact that my head feels like it's been carpet bombed and I'm out of coffee...there's a Catch-22 in there that is literally driving me crazy... This is going to sound like a ridiculously dumb question but, were you looking to cash in on the options at expiration or trade them? Is the blowout to the upside/downside enough to compensate you for the premium and whatever "opportunity cost" (aside from interest rate considerations) you're looking at in terms of lost liquidity? Whatever I know about options was learned in a Finance class and was pretty much limited to valuing them for use as a hedge, as opposed to using them explicitly as a trading vehicle, so I'm pretty much a babe in the woods when it comes to strategy. Sorry. Definitely gotta make a run for some java... Good trading, Tom

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