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Technology Stocks : Micron Only Forum

MU 362.75

+7.8%

Jan 16 9:30 AM EST

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To: Knighty Tin who wrote (33315)	5/13/1998 11:36:00 PM
From: DavidG	Read Replies (1) of 53903

Mike, first of all, part of my posting was a typo and should have read 60, not 69. No problem, we all make Freudian Slips now and then.<g> Anyway I was checking out the latest prices of the MU puts and I am trying to determine how the PUTS long term can fair from one strike price to another. See prices below: cboe.pcquote.com Now JUNE 25's(MURE) cost me 5/8 and June 30's(MURF) are 2 3/8. The 25's require MU to drop 5 1/8 in 6 weeks before I break even...so...I think if it moves this far this fast than it is possible it can overshoot and go even lower and a 4 bagger is also possible. But Mike, I don't think this is very probable and worth the risk so I think I'll pass. With the 30's at least this will be in the money so I am interested. MU only has to drop 1 7/8 pts to break even. This is a play I would usually make in my IRA when I feel MU has reached an overbought point on the Stochastics chart. A 4-bagger though would require a 10 point drive to about 17 1/2 and don't believe this has too much probability for the risk. But otherwise I think we are playing the same game. As far as the October PUTs and Jan Leaps, I will review tomorrow, but on the surface seem more difficult for the homerun plays b/c they get significantly more expensive unless you go to the out-of-money options... but then the probability of getting a hit drops off very fast. If I am missing something please stop me so I can get back on track. One other thing. With a short position and the proper stops there is no premium, you collect gains immediately when MU drops. Now you can't get a 4-bagger, but then again you do get base hits and you only need 4 to equal a homerun.<vbg> TIA DavidG

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