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To: smolejv@gmx.net who wrote (2669)	4/27/1998 4:57:00 AM
From: Berney	of 11051

Berney on Leaps -- Part 1 As the Dudes know, I tend to analyze things to a fault. The subject of Leaps on this thread has been very interesting to me. I particular enjoy the potential leverage that they create. But, before I get into something I like to prepare a set of data for future reference. But, first a little Leaps Trivia. 1) What is the only DJIA stock that does not have a leap available. 2) Can you guess the only DJIA stock that has no open interest on either the 99 or 00 (that's 2000 for you concerned about y2k)? Answers at the bottom. I set up a spreadsheet of current leaps that are just above the current stock price of all the DJIA stocks and our beloved INTC. But, of course, I went beyond that. I wanted to see what the current effective cost percentage of the various leaps are, which is defined as ((leap strike price - current stock price) + leap option premium)/ current stock price. Algebra is a great subject. Not to discount geometry. I've been reading one of John Murphy TA books this weekend and had fun seeing if I could chart some channels. GE's weekly chart sure make for interesting observations. The point here being that I totally understand that I'm ignoring some probably important things like volatility and trends. But, it is obvious that we have an absolute supermarket of leap prices. Some leaps are very dear in price and others are on sale. Now I've got the data captured and we can see what happens. P.S. I know JT that I should have been filling out the stupid brokerage application. I got a small chuck of change just sitting in my checking account waiting for me to write the check. Maybe today. Then probably something else will distract me. JAN 99 PRICE OPEN COST SYMBOL LEAP SYMBOL 04/24/98 INT PERCENT AXP 110.00 VAXAB 9.13 1250 16.9% WMT 55.00 VWTAK 3.50 4321 16.4% HWP 80.00 VHPAP 6.75 1377 16.2% INTC 85.00 VNLAQ 9.75 13017 15.5% ALD 47.50 VADAT 3.50 72 15.3% GT 75.00 VYRAO 5.50 0 15.0% MO 40.00 VPMAH 3.63 15235 14.4% TRV 65.00 VRVAM 6.88 1847 14.3% CAT 60.00 VKTAL 5.00 85 14.2% MRK 120.00 VMKAD 12.00 1373 13.3% PG 90.00 VPGAR 6.88 1347 13.3% JNJ 75.00 VJNAO 5.00 936 13.3% GE 90.00 VGEAR 5.00 2994 13.3% S 60.00 VRSAL 5.13 1169 13.1% MCD 60.00 VMDAL 5.63 4924 12.9% IP 55.00 VNPAK 4.88 519 12.8% T 65.00 VTAM 5.25 2369 12.7% BA 52.50 VBOAX 4.63 3275 12.7% DIS 120.00 VDSAD 17.63 1225 12.7% JPM 140.00 VJPAH 12.50 178 12.4% GM 70.00 VGNAN 5.88 1646 12.4% IBM 120.00 VIBAD 11.63 5296 12.1% KO 75.00 VKOAD 7.50 579 12.1% EK 75.00 VEKAO 5.63 6180 11.7% XON 75.00 VXOAO 6.63 517 11.1% UK 50.00 VCBAJ 4.63 522 10.8% CHV 85.00 VCHAQ 6.00 412 10.4% MMM 95.00 VMUAS 6.88 183 10.4% UTX 100.00 VKUAT 8.00 75 10.1% DD 70.00 VDDAN 9.88 1066 7.2% CBOE does not indicate any higher priced leaps available. Answers: 1) you won't find AA on the list. 2) you will note the open interest on GT is zero. Enjoy! Comments Berney

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