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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Bill Holtzman who wrote (25519)	7/6/1999 8:51:00 AM
From: t2	Read Replies (3) \| Respond to of 74651

Bill, I basically go very heavy into options sometimes and this is one of those times. That means i select exit targets a little lower than where i think the stock will rise to. I bought most of my calls for July when the stock was between 76 and 85. Have realized substantial gains on these already. Even options i bought last week (july 90s) have doubled. I got lucky! The risk/reward for me to wait for 110 is not there. I have just about decided to start unloading my july calls-(they are all in the money). I will be holding on to leaps 2001,2002 and a lot of stock. I am still expecting a sharp (short term) selloff right around options expiration (July 16) or as late as July. It might not happen but i am not willing to risk big losses on options holdings. I may change my mind about the exit price (95) and wait for even higher (100). A lot of it has to do with the market sentiment. I still feel more and more people are getting away from defensive investment strategies that had been adopted a while ago. Individual investors probably have seen a lot of declines in their bond mutual funds. Instead of really trying determine its implication on the stock market, they instead are moving funds to the stock market. Therefore the stock market keeps going higher. It may take another couple of weeks for this process to complete. Right now we are in the momentum stage. A huge week on the market with MSFT hitting 100 would be enough for me to exit all july options by Friday. That would still leave MSFT as my largest position. I don't plan to wait around for the July earnings report. I would rather try to capitalize on the move going into earnings. Investors are well aware of MSFT's blow-out earnings potential allowing for a good run up but this may not be enough to keep the price up. That is the reason i did not try August options. A settlemement with the DOJ could however change everything. IMHO, if a settlement is announced, there would still be enough time for investors to get on board again for big gains. Good Luck.