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Strategies & Market Trends : The ultimate play:STRADDLES on earnings announcements.
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To: herman cheng who wrote (9)6/27/1996 12:33:00 AM
From: farouk a. hassieb   of 140
 
Herman,
I was very enticed into playing the IOMG straddle today but I didn't.
My strategy is very simple: If today I was to buy the straddle and I am probably going to regret not doing so, I would exit the put option at IOMG's next major support level which lies somewhere between 18-18.5. I am still bullish on the stock and think by Aug the stock will be somewhere in the 28-30 range but there is short term weakness. I highly doubt that IOMG will fall to below 18 like some of the analysts are predicting, but if it does it will be in one big blow, maybe on bad news(which has been scarce for this company). I have played IOMG options many times and have made money many times, and a tip from experience: Don't buy the straddle during regular market hours, the premiums usually go down by 3/8 after the market closes. The closer to 4:10, the better. Today the Aug 30 calls were trading at 2 3/8 until after 4:00 where they fell below 2 on the ask. Since they are so heavily traded the prices are somewhat inflated at times. I believe IOMG will be the next INTC of disk storage. They have announced today that they are planning a logo similar to "Intel Inside" that will say "IOMG ready" which is a step in the right direction. Earnings will catch up to Market cap QUICKLY!
Regards,
FH
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