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Technology Stocks : Dell Technologies Inc.
DELL 138.940.0%Dec 5 9:30 AM EST
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To: Chuzzlewit who wrote (91425)1/26/1999 3:00:00 PM
From: angel  Read Replies (1) of 176387
 
I respectfully disagree with you short term Dell option assessment.
Dell has historically (at least the last 2 1/2 years I have followed
it) climbed up about 30% the 6 weeks before earnings and given
1/3 to 1/2 back the 6 weeks following the report. The only exception
to this is when a split is announced the day of the report earning in
which case it continues its climb even further.

I have bought and made very large profits on calls that expire just
after the Dell earnings report. You definitively have to watch the
stock movement very closely and have your stop-loss orders ready to
fire on any major sign of market weakness.

Buying a 95 Feb call fairly risky but does not require Dell to be
at 97 3/4 by expiration. It requires Dell stock to appreciate at
a faster rate than the time factor of the option. So if Dell climbs
up to 94 by Friday your call will be work closer to $5 for almost
a 100% ROI. At that point you have to have the common sense to sell
before the MMs take your profits back.

When I first learned about option trading in '97 I experimented
with bull-spreads on Dell for a couple quarters. Each time my contracts got called out and I left a lot of money on the table.
Now the only way I write a call is against my shares the day of
the earnings report. In that case you get the extra benefit of the
volatility implosion of the out-of-the money calls.

2c worth.

Angel.
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