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Technology Stocks : Ascend Communications (ASND)
ASND 202.96-2.8%Jan 9 9:30 AM EST
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To: RICK SCHINZEL who wrote (16664)10/7/1997 1:17:00 PM
From: Andie Wei-Ku Lin   of 61433
 
My own feeling is that if it can go up to 50 in 6 or even
12 months, isn't selling the Dec30P "worth the risk"?
You end up getting delivered the stock at a cost of
~28 if the stock tanks...and that is if it is below
30 in December, since most options aren't exercised until
the final week leading toward expiration.

So if Ascend jumps up, you are short the put, which is now
worth very little...you also have time on your side,
so you could opt to cover the short and keep part of the
premium.

So I really don't follow Tim's statement that Ascend is not
worth the risk. By selling the Dec35P, you are not investing
in a risky position at all. Of course, this is a matter
of opinion. :-)
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