Compaq Message Board - Msg: 16674293

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Technology Stocks : Compaq

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To: Elwood P. Dowd who wrote (93781)	11/17/2001 7:55:42 PM
From: Jerome	Read Replies (3) of 97611

Elwood... I was doing the math on some new option position for Monday and I noticed that for CPW the Jan 5's are trading at $5.20 by 5.40... which means that there is little or no premium attached to them relative to the stock price. So if the stock and the options are the same price , it would be smarter to buy more options and less stock. My plan for Monday is to buy the Jan's 5's and once the order is filled sell off my CPQ stock. Check this out a 1000 shares of CPW costs $10400.00 Twenty contracts cost 10600. CPQ at 12.50...the shares are worth 12,500 ....the option contracts are worth 15,000.(20 x 750 =15000.00) The shares yield a 25% gain and the options yields a 50% gain on the same amount of money invested. Any problems with this analysis??? Jerome

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