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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 233.22

+1.8%

Nov 28 9:30 AM EST

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To: dmccoach who wrote (767)	11/12/1997 10:08:00 PM
From: Oeconomicus	Read Replies (1) of 164684

Dan, read my post #761 at techstocks.com for an explanation of the zero cost collar, but basically you buy a put and write a call against your long stock position. The benefit to owners of a stock like this is that they can lock in (within a range anyway) their gains, defer realization of the gain for tax purposes, and then borrow against their stock to realize some cash from their inflated stock. As far as I know, they haven't "sold" for SEC insider filing purposes either, but I may be wrong about that. A note of caution though, it seems to me that you could end up turning a long term gain in 1997 into a short term gain in 1998, i.e. if the stock goes down your long term stock gain gets smaller and your option position produces a short term gain. If you own a large position in a stock like this, I'd suggest using a major broker who knows how tight the collar can be without killing the tax deferral benefit. If your broker doesn't know what you are talking about, better go elsewhere. Bob (sorry folks for getting a little off-t)

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