Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Thomas Tam who wrote (8158)	10/12/1999 1:33:00 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

That was a good summary for the uninitiated, TT, except for this curious passage: your return on investment is based on a much smaller chunk of capital. Therefore the percentages can be huge but the absolute return would be roughly the same Your assumption about the size of my LEAPS investment is absolutely incorrect. LEAPS usually cost about 1/3 of the underlying equity. I purchased 3 times as many LEAPS shares as I would had I bought the common. Therefore the larger % return also provides leverage to the absolute dollar return. Other than that, I mostly agree with you and thank you for your effort. uf

To: Thomas Tam who wrote (8158)	10/12/1999 9:43:00 AM
From: Jill	Respond to of 54805

I'd agree w/ all but the return on calls--can be much higher than stock. For instance, I saw my Jan 200 calls double (as of closing price yesterday) in 2 weeks, while my equity investment in Q did not double. Though one should always be wise about taxes, shaping investment strategy around taxes might not be the best idea...(i.e. not to sell calls because of taxes) Also--and this is akin to "gambling" to some, but over on MSFT thread there are some who make a lot of money buying and selling calls right before expiration--Tech2K studied MSFT patterns and did very well on that--could get 500 or 600% return in a few days. Can't get that on equity Also, Q is so volatile that I'd be more conservative than selling puts on a 10% retrenchment, maybe 20-30% since that happens often enough