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Strategies & Market Trends : 50% Gains Investing

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To: B Tate who wrote (1653)	11/2/1998 5:48:00 AM
From: Dale Baker	Read Replies (1) of 118717

A rocket blew up with a bunch of satellites belong to someone that LOR has a major stake in. I figure in that business, rockets are expected to go BOOM now and then. So I took advantage of the over-reaction and jumped into the long-term calls (known as LEAPs, I think for options expiring more than a year away). I have Jan 2000 25 calls which I bought at 2 when the stock was under 15. Now that it is over 15, they are at 3 1/2. The plus side is that they tend to be stable on the downside and offer lots of room on the upside. And my cash at risk is only 1/6 what it would have taken to buy the equivalent shares. I expect LOR to go back to 25 - 30 next year. With the remaining time premium, a target for the LEAP calls is 6 - 10, or a three- to five-bagger. I did well playing a cyclical move in KCS, a US driller. Grab it anytime you can at 4 or less and sell over 5. I will watch the others you mentioned.

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