How high will Microsoft fly? Message Board

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Technology Stocks : How high will Microsoft fly?

MSFT 481.60

-1.7%

2:18 PM EST

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To: Jean M. Gauthier who wrote (19351)	3/31/1999 1:39:00 PM
From: Srini	Read Replies (2) of 74651

Jean: Re: LEAPs Leaps can be used as a proxy for holding the common, but with leverage, so that for the same investment you get to control a greater number of shares and thus magnify your returns. To this extent you can trade in and out, however, the much larger spread and generally higher brokerage fees make this not very practical. Unlike short term options, there is not much time pressure due to expiry, should the market go against you. Unlike holding the common, there is an end point (expiry) prior to which you must either sell the options,(I think the more popular choice) or exercise them (you need the capital). Either way, you will incur taxable gains, but this should not make a difference in a tax deferred account. Srini.

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