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Technology Stocks : NCDI - Network Computing Devices -- Ignore unavailable to you. Want to Upgrade?

To: Jim Henke who wrote (4197)	6/16/1999 9:33:00 AM
From: J.S.	Read Replies (1) \| Respond to of 4453

Jim, The scenario you paint is somewhat similar to the one whereby puts are sold on a stock one is interested in buying. If the stock drops then one gets a good price and keeps the premium (instead of getting a potentially better price). If the price doesn't drop then one keeps the premium. I did this before with CSRV/WCOM. Worked well. Since buying calls is somewhat similar to selling puts what you say makes sense. However, I wonder if it is better than just "silently accumulating" at a low price and selling some when the stock froths a bit. Even if not, for a large institution the "silently accumulating option" may not be viable and as well as selling some immediately. Yes options expiration usually means a regression to the strike price. This is caused by arbitrage when options become undervalued because of liquidation pressure (something I don't do because I don't have the means) and trading using the options as a hedge (something I have done with success). With the open interest on the calls so high, I do anticipate this will happen at some time if NCDI does rally in the next few days. Keep sharing your opinions on this as I will be tuning in with interest. Thanks, Joe

To: Jim Henke who wrote (4197)	6/17/1999 1:15:00 AM
From: J.S.	Read Replies (2) \| Respond to of 4453

Jim, NCDI has made a steady if slow move. There is virtually no premium to be paid on the options for June. This is because this stock has the volatility of a rock. Only 2 June Calls traded today (@3/16). C'mon everyone let's get this stock movin' upward. In my opinion, Monday morning would be a logical time for analyst upgrades/coverage in light of the rebounding NASDAQ on the heels of the positive presentation by NCDI at the Paine Webber Conference. I would expect that the clients (of the analysts' firms) would be alerted in advance. This fits in perfectly with the scenario you have been talking about. I have put my money on it. ---Good Luck, Joe