Ed, (RE: your leaps strategy),
Good concept, however you forgot to mention a couple of
factors:
1. During these moves Microsoft has had fluctuations where
the holder of LEAPS will have seen his net worth oscillate
wildly, like for example in October, when Microsoft dipped to
85. And this person holding the leaps would have to keep their
cool during this period. Easy you say? Ah, easier said than
done. Also, they would have to keep their cool and not sell
too soon, and how do they determine when to roll up?
2. Taxes, Taxes, Taxes. Everytime you roll up your leaps you
have to pay capital gains taxes which eats about 28% of the
profits each time.
I will submit that I expect Worldcom, Cisco, America Online, Dell,
Lucent, Microsoft to double in the next 2 years. Go ahead and try your Leap strategy, the world is your oyster. |
