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Technology Stocks : INTEL TRADER

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To: Chris who wrote (2408)4/17/1998 5:23:00 PM
From: smolejv@gmx.net  Read Replies (1) of 11051
 
I see LEAPs as younger, brasher brothers of stocks. The more in the money the closer to the big Bro. If your horizon is lets say more than 3,4 months you have (my experience, Im not copying it out of some book) 1:1 correlation with the underlying and the only thing that may bother you, is higher volatility of the security compared to the underlying. Well, somehow you have to pay for the higher leverage.

Low leverage <-> deep in the money <-> ROI comparable to the ROI of the underlying * pi (g)
high leverage <-> at or out of money <-> ROI up to 10 or more

I am regular in intc, MSFT and Csco - well used to be, I have CSCO stock and MSFT far leaps at the moment and waiting for somebody to offer me (here in Germany) INTC leaps that go a little further than say 3/99

Exit strategies? Same as for the underlying I guess. Why should it be any different?

Keep talking

Janko
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