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To: smolejv@gmx.net who wrote (4779)	12/9/1998 2:22:00 AM
From: Chris	Read Replies (2) of 11051

DJ, RE: LEAPS I don't know how long you (and the other dudes) have been playing with LEAPS, but for me this is my first year. My first impression is that like a good red wine they can age well (only in an up market :). This also fits my personality. I tend to like to buy and hold more than jump in and out. My market timing is off. :) Maybe I'm just having beginners luck, but here are my LEAP trades for the year: Stock LEAP Price Sell price Buy Date Sell Date % Return INTC 1/00 80 call 23 ½ 39 ½ 02/10/98 11/20/98 68% MSFT 1/99 70 call 15 5/8 42 02/20/98 11/20/98 168% CSCO* 1/00 40 call 18 ½ NA 03/12/98 Still Hold'in 141% LU 1/00 65 call 14 32 03/31/98 12/03/98 128% CPQ* 1/00 20 call 10 ½ NA 04/03/98 still Hold'in 126% SEG* 1/00 20 call 10 7/8 NA 04/03/98 still Hold'in 35% LU 1/00 80 call 12 3/8 22 ½ 04/08/98 12/03/98 82% LU 1/00 80 call 12 3/8 25 04/08/98 12/04/98 102% PFE* 1/00 120 call 24 NA 04/30/98 still Hold'in -38% * Option closing bid price used for YTD return CSCO bid 44 ¾ CPQ bid 23 5/8 SEG bid 14 3/4 PFE bid 17 7/8 Both SEG and CPQ were converted from owning stock to buying LEAPS. Here is a little study: I had CPQ & SEG stock and converted them to LEAPs on 4/3/98. Stock # shares Stock price Current price %change Profit CPQ 300 25 7/8 41 7/16 60% (15.5625/s) 4668.75 SEG 200 26 ¼ 32 7/8 25% (6.625/s) 1325 LEAP #contracts Buy Sell % change Profit CPQ 1/00 20 call 5 10 ½ 23 5/8 126% 6562.5 SEG 1/00 20 call 3 10 7/8 14 ¾ 35% 1162.5 Result Gain/Loss vs stock CPQ 1893.75 +40% SEG (162.50) -12% The volatility on SEG has been way down in the last few months. I paid over $4.00/s premium then and now there is under 2.00/s. I CPQ premium has decreased but was covered buy the stock price increase. In both LEAP cases there was less initial capital used than with the original stock purchase. Now I think that if CPQ had not moved up so much in the last couple of weeks I would be sitting on a loss relative to a stock purchase. I don't know about anybody else but with LEAPS I'm paranoid of running out of time with the stock in a down cycle. I decided to start rotating out of 1/00 LEAPS at the beginning of the month, but without having the 1/01 LEAPS purchased. Now MSFT, INTC, LU have made powerful moves without me :( In the future, I will not do this unless I want to completely close my position with that stock. I guess this is part of the learning process. Christopher

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