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Politics : Formerly About Applied Materials
AMAT 256.89-1.2%3:59 PM EST
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To: Cary Salsberg who wrote (57394)12/13/2001 3:01:25 PM
From: Claude  Read Replies (3) of 70976
 
re: Bought AMAT @ $42.209, sold July $50 call @$4.60

Cary or other option gurus,

Could you please explain to me the downside of Cary's trade because I don't see any.

First let me make sure I got this straight (I am an options novice):
Cary bought around 42 and sold calls at 4.6 effectively reducing his cost to around 38 1/2. He could be called the stock in July if its over 50 capping his gains but then I think we would all be happy with roughly 30% gains between now and then. So whats the downside? and why is anybody buying these calls?

thanks, TOAD
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