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Politics : Formerly About Applied Materials
AMAT 223.31-3.2%3:59 PM EST
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To: Tito L. Nisperos Jr. who wrote (24952)10/6/1998 2:23:00 PM
From: marc henschke  Read Replies (1) of 70976
 
Jacob:

On a positive note, you may be underestimating the returns that you will derive from your leaps. Having owned AMAT leaps extensively (and at times exclusively) over the past few years, I can tell you that my experience has been that so long as a significant amount of time remains before expiration, your leaps will increase in value in percentage terms at somewhere between 2.5 to 3 times the underlying stock. Accordingly, if AMAT were to reach $46 or so over the next 9 months, your leaps already will have tripled to $12 even before the big money dollar for dollar moves begin.

As you will come to learn (sometimes with frustration and sometimes with exhilaration), the price movements in AMAT leaps often appear to be more art than science. You'll have days where the underlying stock goes up $3 per share and the leaps go down. On the other hand, some days the stock and the leaps will both go up $2 each, even though the leaps are worth only 25% of the stock price.

Buckle up for a wild ride. If your timing proves to be astute, your leaps will turn out to be an outrageously profitable investment.
My opinion is that you likely have made a damn good bet, although the 2002 leaps that will be released to the market next May seem to be an even bigger lock given the current timetable for the 300mm roll-out.
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