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Technology Stocks : Cheyenne Software - Will it be bought by Computer Assoc.?
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To: WebNoise who wrote (38)4/12/1996 9:10:00 PM
From: olduser   of 130
 
John,
First of all, just about anyone with a brokerage account can buy or sell options. Just call your broker,(hopefully a deep discount broker) and ask for an application to trade options. There are many types of options but the ones I recommend are called "covered calls". Basically what this means is that someone is willing to pay you for the option to buy your stock (stock you already own) at a specified strike price on or before a specified expiration date. Your broker will send you a pamphlet explaining puts and calls in more detail. The option premium is the price that someone is willing to pay you for the right (but not the obligation) to buy your stock in the future at the specified price. The buyer of the call is betting that the stock price will rise. The seller of the call is reducing his cost basis in the stock (the price he pays for the stock) but gives up any windfall if the stock suddenly soars in price. In CYE's case, the bad news is already out for the next couple of quarters so the stock price should be fairly stable.
Feel free to E-mail me at Bruce_Needleman@prodigy.com for more info. I believe the Options Institute puts out a free video on the subject. I think the phone number is 1-800-THE-TOOL.
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