Judy,
Great to hear from you...
The reason I didnt sell into strength yesterday is that I wasnt around all day and the fact that I bought these at levels of about 116 or so about a month ago.
I have seen that DELL options are priced about 5 points per month higher, I payed about 10 points premium, survived the downside and was ripped on the premium strip when the 115's got into the money.
So now there is 5 points of premium in them, and they are 3 points in the money or so, thus I am not at break even.
I feel there will be a good amount of run still, but todays action was not impressive.
Also, since the split occurs on the 4th, there is a good two weeks afterwords before expiry.
My goal to exit is 130, if that occurrs too quickly, I will revise that goal. The downside is limited IMO, as long as the market does not decline severely. A small decline is acceptable, since DELL will be in the front of a NAZ 100 runup..
If I were instructing you (I am not) I would purchase a leap or sell a longer put into DELL after the split. Normally the stock will settle in after a split and then run afterwords. I plan on purchasing a July 99 or somthing in that area at the post split price. I feel with their China plant opening, and their small percentage of market share that they will continue the run they have had since I have known you.
Understanding business models I know how difficult it is to implement a BTO/JIT inventory model. It can and will take companies longer than a year to get it right, it isnt enough to simply copy the blueprint.
HWP/CPQ and the like are going to be lucky to get their models off the ground and emulate DELL..
Just a few thoughts.. |
