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Technology Stocks : AUTOHOME, Inc

ATHM 23.96

+0.6%

3:59 PM EST

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To: yihsuen who wrote (7228)	4/1/1999 5:05:00 PM
From: Ibexx	Read Replies (2) of 29970

yihsuen, I previously owned a sizable position of ATHM acquired at IPO and post-IPO (average cost: ~$15), but sold the entire position after realizing a 150% gain. (Still kicking myself) Today's short-selling of ATHM July 140p (AHQSX; 15 contracts) followed a different strategy of mine. These options were sold naked at a rich premium of $25 per share and it works like this: Come July's expiration date if ATHM's share price is above $140, I'd get to keep all the premium (15 x 100 x $25 = $37500 minus commission). If, however, ATHM's share prices dips below $140, I would have the shares assigned to me (meaning I'd be obligated to buy 1500 shares at the price of $140 per share), and my effective cost of this purchase would be $115 per share ($140 - $25 plus commission) versus $154 as of today's closing. At this price it would be the steal of the century. Either outcome would make me be happy. Hope the above helps. Regards, Ibexx

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