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To: Duane Greg who wrote (81412)	10/20/1999 9:47:00 PM
From: Lizzie Tudor	Respond to of 164684

Can you tell me why you prefer margined positions to options? Only that for the internet stocks there is a hefty premium on the options.... therefore you need an agressive move before you are in the money... for example AOL Nov 120 calls are 8 1/4 today when AOL closed at 118. Therefore if you don't see at least 130 on AOL in november you have lost your money... that is very close to gambling, imo. Otoh, you can take a highly leveraged position of say 2000 shares... you tie up more money doing this I understand... in this case 78K... but if you get to 130 you will profit 24K, not bad. With options you can take a 20 contract position for 16.5K, so much less of an investment... but to make 24K the stock would have to go to 140, since only at 128 you are in the money. It all comes down to how much money you have... I know the small investment of options is tempting but how realistic is 140 for AOL by november? The best thing for options I think is to buy and when the stock has a significant run - say 8+ points, then sell the calls (or puts) at a gain. If you wait until very close to options expiry you will find the calls depreciate beyond the difference in stock price - this is because a lot of people have calls but not the resources$$ to actually call the stock. Options are just a risky game and as I say I did more of it because Discover really is restrictive with margin. But once I move my acct when I want leverage I'll go back to margin... its just easier all around, imo.