Intuit, the Quicken people... Message Board

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Technology Stocks : Intuit, the Quicken people...

INTU 676.31

+1.3%

Nov 3 3:59 PM EST

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To: David W. Taylor who wrote ()	3/12/1997 6:21:00 PM
From: Thomas M. Coe	of 74

I have looked over the fundamentals and decided the stock is undervalued. The current price sales ratio is around 1.7 and the sales growth is steady at over 30. So Today I wrote five naked (or cash covered) puts, April 20's for 1 1/8. If the stock is put to me I will hold it; if the puts expire worthless I will calculate my profit based on holding margin of 50% of the strike price, or $20 x 50% x 500 shares = 5000. With a premium of 500 x 1 1/8 - $50 commission = 512.5; Return is 11% for six weeks, or 88% annualized. Seems like a good bet to me. Of course the stock could drop to single digits or worse and I could loose $5000 or more. So I will use a mental stop loss; if the stock drops to 18 1/4 if will buy back the options, probably cost 2- 2 1/4. Should my stop loss kick in I would check for news and fundamentals again. If they still look good I would try to write more naked puts at 17.5 strike 1-4 Mo. out. Since I am trying to write down my strategies, I might as well through them out for comments. Tom

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