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

To: Jean M. Gauthier who wrote (26054)	7/15/1999 11:20:00 AM
From: PMS Witch	Read Replies (1) \| Respond to of 74651

Option stuff ... Microsoft & others One can 'mix & match' their option position to take advantage of the differences in how options are priced in relation to the underlying security. This person summarizes one approach quite well: Message 10514370 Observing this, one could review a position they've maintained for some time, and with some innovations in their strategy, unlock some of the potential gains they've made. As the above poster points out, the speculative value of the LEAP being discussed has approached zero. Exploiting this 'no cost' asset, one could write a 'covered' short position with no cost and pocket the premium. Again, this must fit your overall portfolio goals. Cheers, PW.

To: Jean M. Gauthier who wrote (26054)	7/15/1999 11:35:00 AM
From: PMS Witch	Read Replies (2) \| Respond to of 74651

Option prices ... Another observation: Nearing expiration, some deep 'in-the-money' options can not only lose all of their speculative value, the speculative value can become negative as the option trades below its intrinsic value. Fortunately, it doesn't 'go below' very far: And never far enough for arbitrage trading. Microsoft's stock price hits potholes from time to time. When this happens, the option market presents us with very compelling 'fire sale' prices. One profitable approach would be to determine the price you would 'ideally' like to pay for your options and wait until a 'mark-down' day to act. You'd get a favourable price. My belief, and I've posted it before, is that Microsoft will not retreat with any significance from a steady march to $110. At $110, we could see a volatile period where nimble traders will outperform the long term holders. We'll see more opportunities, to both buy and sell, at that time, than now. Hope this helps, PW.