The ultimate play:STRADDLES on earnings announcements. Message Board

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Strategies & Market Trends : The ultimate play:STRADDLES on earnings announcements.

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To: Jeng Chiu who wrote (26)	7/9/1996 12:06:00 AM
From: farouk a. hassieb	of 140

Jeng, USRX is sitting near ST support in the 78 range. It has bounced off of this level at least 3 times in the past 2-3weeks. I am looking to buy the July 85 calls tommorow if I see USRX bounce off of 77-78, which I have a very strong feeling it will. I expect the stock to be trading in the mid 80's before earnings at which time I will look to purchase the July 80 puts. In my opinion, a good earnings report and positive forward comments from the company could push the stock back in the mid 90's. The stock has been under pressure recently with purchase of Scorpio and with ZOOM Tele. forecasting weak modem sales. The option premiums for USRX are quite large so I am hesitant in taking a large straddle position. Since I feel the outlook for USRX is favorable going forward, I may buy the stock long in the morning and hedge with puts before earnings. I haven't decided on my strategy yet, but I'd better think quick. Keep me informed of what strategy you will take. GOOD LUCK! Regards, FH

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