Dell Technologies Inc. Message Board

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Technology Stocks : Dell Technologies Inc.

DELL 138.94

0.0%

Dec 5 9:30 AM EST

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To: Dell-icious who wrote (91417)	1/26/1999 2:33:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

Dell-icious, I expect Dell to be an approximate double for the year. That implies approximately a 6% gain per month. With Dell trading at around 87 1/2 that would mean Dell would trade at about 92 3/4 come options expiration. Now if I get called, my gain will have been 1 - 95/(87 1/2 - 2 3/4)%, or 12.09%. On an annualized basis that is 294%! The other part of the optimistic calculation is: suppose I'm wrong and Dell climbs above $95. Well, if I buy back in at under 97 3/4 I still have a gain compared to simply holding the stock. The negative is that DELL drops, in which case I am buffered to the tune of $2.75. I think that buying short-term calls is gambling. While they potential payoffs are huge, the risks are even greater. When I sell calls I think I am the house (in gambling terms), and the odds are clearly in my favor. So I prefer to feed your appetite for gambling. The vig is great. If you buy a Feb $95 for 2 3/4 you will only make money if Dell closes above $97 3/4. I don't like those odds. TTFN, CTC

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