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


To: Jean M. Gauthier who wrote (26023)7/14/1999 4:09:00 PM
From: ericneu  Read Replies (1) | Respond to of 74651
 
"Thank you eric, but I mean, we are talking about a 2001 LEAP.
2001

Would 3 months hit me for more than 10% (closer to 15%) actually ?"
---

Well, let's make it a math problem :).

When you bought them (April) they had roughly 21 months until expiration. They've now got 18 months until expiration, so approximately 15% of the original time premium has gone by.

You can't base it strictly on that, however. LEAPs will behave differently once they're down to 9 months or less of time premium, plus there's the "expectation fudge factor" I mentioned in my previous post.

I've got some ZMFADs, and I've seen similar behavior. I'm hanging on until after earnings (or beyond).

- Eric



To: Jean M. Gauthier who wrote (26023)7/14/1999 4:15:00 PM
From: Frank Ellis Morris  Read Replies (1) | Respond to of 74651
 
Jean, Microsoft is a hair away from breaking through its all time high. Monday the big gun along with IBM reports its quarterly earnings. If China does not nuke Tawain by then, we should have a great day in the techs and cheer for Microsoft and big blue.

Best Regards
Frank



To: Jean M. Gauthier who wrote (26023)7/14/1999 8:21:00 PM
From: Jay k.  Respond to of 74651
 
Would 3 months hit me for more than 10% (closer to 15%) actually ?

No it went down because of implied volitility.
Change of 10% in IV will cause a major change in your option price.
Just mess around with metastock option scope or other software
and change the time prem and IV.