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Technology Stocks : CMGI What is the latest news on this stock? -- Ignore unavailable to you. Want to Upgrade?

To: PLeaps who wrote (12673)	8/21/1999 10:10:00 PM
From: sjemmeri	Read Replies (1) \| Respond to of 19700

Again, you are misunderstanding the strategy - both its purpose and the actual mechanism. The goal is not to make money like covered calls. The goal is to own cmgi to participate in the DSP of Navi, etc. while not taking any downside risk on cmgi itself. I did not sell a call for $15 and cannot lose more than the commissions unless cmgi drops below 15. Let me be more specific. A few weeks ago when cmgi was $90, I bought 100 shares for $9000. Then I sold the Jan $15 call for $7500. Thus, my net investment is $1500 plus commissions. Recently, the stock dropped to around $65 - at the same time the covered option dropped to $50. IOW, I could have bought back the call for 50 and sold the stock for $65 and gotten back my $1500 minus commissions. The stock and option will move together with a $15 spread unless it goes out of the money but that requires cmgi to drop below $15. Granted, I can't participate from stock appreciation but I'm not trying to do that (unless stock drops very low in which case I might buy the call back and go long). To make money, I'm counting on cmgi to stick with DSP for Navi with a 100 share minimum to participate and the whole thing to happen before January. Oh yeah, and participating in the IPO needs to be profitable. If more than 1 cmgi DSP happens before Jan that's a bonus.