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Politics : Formerly About Applied Materials
AMAT 257.02-1.1%3:59 PM EST

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To: Claude who wrote (57410)12/13/2001 6:13:19 PM
From: Sampat Saraf  Read Replies (2) of 70976
 
Claude,

One other scenario is AMAT goes to 60 in spring 2002 but then craters to 20s and 30s in July because of some big fiasco. (Not that it is going to happen!!)

In Spring, he will not be able to take profits because the calls will be equally expensive to close. In July he will be left holding the stock which may take a while to mend.

On the other hand, if he had just AMAT stock without the calls, he could collect his profit in spring 2002 and buy back the stock cheaper in July 2002.
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