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Technology Stocks : Leap Wireless International (LWIN)

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To: pcstel who wrote (2327)7/2/2002 11:31:29 AM
From: oconnellc   of 2737
 
At this point, what would seem to be the smarter play...

Buy 03 Jan $5 calls

or

Buy the stock today

(Just for purposes of comparison)
if the price is $10/share in Jan 03, for $100 investment today (assume the calls are $.20 each), that gets 500 shares for a profit of about $2500. Buying the stock gets you about 110 shares for a profit of about $990.

if the price is $5 share in Jan 03, the calls make $0 profit, where the shares make a profit of about $440.

So, what are the relative odds of the price being $10 vs. $5 in Jan 03?

Chris
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