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Technology Stocks : Loral Space & Communications

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To: Ramsey Su who wrote (1819)1/31/1998 11:24:00 AM
From: Valueman  Read Replies (1) of 10852
 
In the third part of the Barron's Roundtable this week, Marc Perkins describes his strategy in investing in Loral. He suggested buying the common and selling the LEAP calls. Here was his take:"The stock is at 20 1/8, but you can sell the JAN 2000 30s at 3 3/4, take 15% of your cost out. The gain, if the stock goes up, is 77%. You can also do the 25s at 4 3/8 and take about 25% of your cost out, in which case your two year gain, if the
stock goes up, is about 59%. This strategy is pretty attractive." Not a bad idea for reducing risk. I know we are all unabashed bulls, but limiting risk is never a bad idea. A bull spread with the LEAPs is also an option.
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