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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (83484)9/7/2000 11:36:09 AM
From: Franco Battista  Read Replies (1) of 132070
 
Hi Michael,

I've done the math on a number of stocks like WCOM, EXDS and a few more of the volatile ones. I used Jan 2003 leaps as my basis. I simply could not come up with a formula that yielded 12%. The best I could do with EXDS was come up with a 3$ profit over two and one half years (on a 42$ investment). That's about a 3% yield. Are you assuming a rising stock price in order to get a better yield (you would then close the position to realize the gain)? If this is the case, then it is not a risk-free strategy. TIA, Franco.
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