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Technology Stocks : C-Cube
CUBE 37.09+0.3%12:11 PM EST
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To: george harriman who wrote (16204)5/27/1997 9:37:00 PM
From: chao yang   of 50808
 
Hey George Harriman:

I will give you a piece of advice which has worked for me. It did work for me in CUBE case so listen up.

Why don't you find a good call option month (less than 3, of course) with a good price on that call option, sell the option and buy the stock at the same time. That way you make the money on the call option if the stock is not IN THE MONEY while at the same time maintain the stock for further call option sale?

Let's give my example. I bought CUBE when it took a HUGE hit from 25 to 19.5. I bought it at 19 7/8 and sold June 20 calls for 1 9/16. It dived further to 17 but didn't bother me cuz I would have made the complete 1 9/16 if end of third week of June came up. If the price stayed at 17 after that third week of June, I could sell Aug 20 or Nov 20 calls and make more money off those options.

There are only 2 negatives regarding this technique:
1. You will only make a certain amount of money, which is the price of the option. If the stock, all of a sudden, hits 50, you are still stuck at 20. But be honest, you would THINK that this could hit 50 so quickly.

2. If this stock is like Media Vision, which if it is I'll gladly give up all my money for this lousy stock because if I hit 2 MVIS in my lifetime, I must not play this stuff anymore (maybe bet on the 49ers to win another super bowl or something).
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