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Strategies & Market Trends : Gorilla Game Investing in the eWorld -- Ignore unavailable to you. Want to Upgrade?

To: Teflon who wrote (898)	12/8/1999 8:31:00 PM
From: gdichaz	Read Replies (1) \| Respond to of 1817

Tef: Good to see you will have some time to post here. Jill among others helped keep this thread going, so I think we owe her. And I would enjoy learning from the option discussions even though I am afraid I would have little to contribute to it. All I have is some old Jan 2000 LEAPS on the Q bought in late 1997. Wish I had more. Yes the shiny pebble SFE you and I tried so hard to get the G&K'ers to pay attention to is really moving the right way. When the ICGE IPO happened, I added to it. Glad I did. All in all, a happy camper. Best personal ....etc. Cha2

To: Teflon who wrote (898)	12/12/1999 7:15:00 AM
From: pekos	Respond to of 1817

Options and my evil twin After reading the manual, I try to migrate from a short term trader to a long term buy and hold investor. With the runup of QCOM to over $400 in November, I nearly failed and wanted to sell. Everything in me has been crying "Windfall profit, take it!", but I hold the shares. But the trader in me would like to have some shortterm action, so I decided to do some option trades with "Risk Money". I will buy on monday a QCOM Jul 2000 280 Call @ 148.75 with 223 days to expiration, Delta Delta 0.85 I will sell on monday a QCOM Jan 2000 430 Call @ 24.5 with 41 days to expiration, Delta 0.36 Profit calculation: called out 150 = 430 - 280 strike difference +24.5 Option premium received -148.75 Option premium paid ----------- 25.75 profit in 41 days ===== 25.75 * 100 - 2xCommission (usd 29 for me) usd 12483 Money at Risk usd 2517 Profit = 20.16% in 41 days or 177.07% annualized sold option expires worthless usd 12425 Money at Risk usd 2450 Profit = 19.63% in 41 days or 172.33% annualized after the January expiration the next call should be sold. stock and option tanks The BreakEven Point of the bought option is $428.75 QCOM has to be at or above $428.75 @ expiration in Jul 2000 For possible repair strategies, I suggest to read "Options as a strategic investment". If I have to repair the position, the annualized return drops dramatically. announced stock split QCOM announced a 4:1 stock split. Information for the option contracts will be available from cboe.com Did I forget something? Open for any thoughts. Peter