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Politics : Formerly About Applied Materials

AMAT 233.73

+1.5%

10:48 AM EST

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To: StanX Long who wrote (54185)	10/16/2001 8:24:02 AM
From: Sampat Saraf	Read Replies (2) of 70976

Stan, The options can be more rewarding as well as more risky. I had bought some leaps on Microsoft in 2000 when Microsoft dipped to 75 from 100. I thought it did not participate in in technology bubble valuation and should follow thru to higher valuation over a two year period. Now the leaps are going to expire worthless in Jan 2002 as the strike is 100. For your scenario, returns on your investment as a function of Jan 03 AMAT price will be as below. See the negative returns for options if stock price is below 47 in jan 2003. Option Share Jan 03 Option Share Cost Cost Price Return Return 47.4 33.6 35 -100.00% 4.17% 47.4 33.6 45 -67.57% 33.93% 47.4 33.6 55 102.70% 63.69% 47.4 33.6 65 237.84% 93.45% 47.4 33.6 75 372.97% 123.21% 47.4 33.6 85 508.11% 152.98% 47.4 33.6 95 643.24% 182.74%

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