Formerly About Applied Materials Message Board

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Politics : Formerly About Applied Materials

AMAT 262.92

+0.4%

Dec 29 3:59 PM EST

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To: 16yearcycle who wrote (40773)	12/13/2000 7:46:36 PM
From: Jerome	Read Replies (1) of 70976

NVLS under 30 and AMAT under 40. If this does happen in the next few days then here is a plan. This is possible because options expire this Friday and how these stocks end up on Friday is anyones guess. I'm a buyer of NVLS at 29 and AMAT at 38. As Gottfried has pointed out when FA and TA collide go with TA. At the same time that I make these buys I will be writing the Jan. 30's for NVLS and the Jan. 40's for AMAT. A call out on both positions will result in a 15% gain in 5 weeks. Lets take the bad case scenario as an outcome. AMAT drops to below 35 and NVLS drops to 25. Then for Feb. the correct option would be NVLS Feb. 25's and the Feb AMAT 35's. These positions will still be profitable. I may go on margin just for these two transactions and use the call premium to reduce the amount of the margin loan. I would not do this with any other semi-equipment stocks. January is the earnings season and I believe that what we will be seeing is AMAT and NVLS meeting or exceeding expectations but giving very cautious guidance going forward. If this happens the stocks will either rally slightly or enter a trading range for the next few months. The problem with sitting on the side lines is that it just doesn't pay the rent. Anyone with different ideas put them up for us all to review. Things are not as bad as some posters on this thread fear nor are they as good as others think they should be. The truth is somewhere in the middle. Jerome

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