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.

Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: Fritz Hatt who wrote (52470)	12/4/1999 9:35:00 AM
From: Jim Willie CB	Read Replies (1) \| Respond to of 152472

Fritz, I am in similar position, owning Jan330 calls if you roll forward, you got 1999 tax consequences... if you hold until Jan2k, your tax consequences are not until April2001... in the meantime, money spent on taxes can work for you for another full year while QCOM rises another 300% I have calculated many many times the percentage gain (for next 40 point upleg gain, say) on a deepinmoney call like the Jan330 versus an outofmoney call like the Jan400 or Jan420... I know my man Voltaire might could disagree with me, but the difference in percentage terms is very minor indeed... this is especially true with the current situation, which finds outmoney Jan calls loaded with premium the deepmoney calls now are moving point for point... in fact my Jan280 were up more than the QCOM common share on Friday!!!... in pct terms, it was up about 12% (from memory)... but the Jan400 call was up the same pct... the Jan330 was up the same pct... surprised to see some premium holding very well in deepmoney calls still when outmoney calls become inmoney calls, like when QCOM runs past 430 per share soon, the Jan400 will only then reap a greater return on investment in percentage terms... you gotta think in pct terms the drawbacks in a rollover: - tax consequences in 1999 - selling at bid with wide spreads - buying at ask with wide spreads - commissions (not cheap) on both buy & sell I almost never roll... my calls deepmoney are still moving nicely... I got Jan280, Jan330, Jan400... I hate deepoutofmoney calls as for converting to shares being risky, I believe options are hugelier riskier... I intend to convert to shares and use margin to secure the conversion... but I will not max out on margin... and to manage the risk, I intend either to buy long option puts or to sell covered calls in late Jan2k I anticipate that after Jan2k earnings, we will have undergone three events... split, Nokia deal, and earnings... one event is enough to trigger selling on news... some hedging might be prudent at that point... my best guess for timing is a postselloff sometime between Jan28 and Feb10 / Jim