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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: T L Comiskey who wrote (32954)	6/23/1999 10:26:00 AM
From: freeus	Read Replies (3) \| Respond to of 152472

Tim try the 2002 leaps: I got one strike price 150: I paid 49 7/8, but it was 44 on Monday: the symbol is -WLUAV I have 4 leaps for 2001 at strike 100 that have done so well I am hoping to sell two and use the money to exercise the other two (after a while not yet) and have some long shares. Freeus

To: T L Comiskey who wrote (32954)	6/23/1999 11:30:00 AM
From: JohnG	Read Replies (2) \| Respond to of 152472

Comiskey-Leaps-First, I'm no expert. So, others please chime in if something I say sounds stupid. My thoughts are to push any gains into capital gains(@20%) vs ordinary income (@39.6%). Assuming 50% broker margin requirements on trades, the mkt price must apx double the strike B4 you call the stock into your act (a non-takable event). Then, you must keep the stock 12 more months B4 getting the lower cap gains tax. Thus, You must 1st decide what you think the mkt price may be in say Nov/Dec B4 they expire in January. This price would be typically based on the next year's proj earnings. So, in Nov, 2000 you would be past the 9/30/2000 earnings report and looking at say $5.50/share proj for 9/2001 leading to an estimated stock Nov 2000 stock price of say $240/share. This stock price indicates I mighe buy 1/2001 options for up to $130 strike. Then you look at strike price vs option cost. The the higer (higher the more out of the money you go)the No, the more appreciation you get for your investment. The No. appears to be 2.6 to 3.1 at today's prices. I like 1/2001 130's although I fear that Q's price may possibly not reach $260 by Nov/Dec 2000. Also, I like 2/2002 140's. Keep in mind that, if the stock price rises faster than you have conservatively estimated, you can always call the stock early and start the 1 year clock towards capital gains treatment. One thing nice about leaps is that there are no margin calls (lets ya slep at night)and you need not concern yourself about these 20% stock price fluctuations. However, options are expensive. John G