How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 483.03

+0.5%

Dec 5 9:30 AM EST

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To: Li Cai who wrote (5754)	4/11/1998 12:51:00 PM
From: Gerald Walls	of 74651

It looks like a good time to buy msft. However, I am a little afraid of taking an action because msft will announce earning next Friday and goes to court next Tuesday. If earning is not as high as Street expects, msft may drop like a rock. However, if the earning is extremely good, it may be too late to buy msft. Buy the stock and an appropriate number of puts as insurance. Your scenario is the textbook case for this strategy. For more leverage, you could buy a straddle, I think it's called, by buying both puts and calls so you profit by a strong move in either direction. Selling covered calls and buy protective puts is allowed by nearly any broker if you have any stock experience at all. You'll have to fill out an application to trade options if you haven't done so already.

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