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

To: Voltaire who wrote (55017)	12/19/1999 12:45:00 PM
From: voop	Read Replies (1) \| Respond to of 152472

Hi Voltaire What about the taxes? I would rather have a put under the stock that goes worthless and a tax loss and delay capital gains than a six-figure capital gains hit and have 40% of money not working for me...assuming stock goes up. If stock goes down, put increases accordingly and I can sell option and buy calls or underlying when smoke clears. Interested in your thoughts about taxes. Voop

To: Voltaire who wrote (55017)	12/19/1999 12:49:00 PM
From: Cigar	Read Replies (2) \| Respond to of 152472

Voltaire -- what are the tax consequences of your strategy? It seems (in my very limited knowledge) to be awfully costly unless you and your clients have been in for more than a year, unless, of course, you expect Q to go into the tank in a big way. I look forward to your response, as I have a series of long and short term positions myself, and find my finger twitching toward the "sell" button daily, for no better reason than, no matter how wonderful the company, certain basic laws of gravity probably still apply somewhere, some time.

To: Voltaire who wrote (55017)	12/19/1999 7:26:00 PM
From: Boplicity	Read Replies (1) \| Respond to of 152472

So you going to bail. It's never a bad I idea to book, since it's only paper, unless you book it. Ok. What happens if the stock does not correct? Sure you get the gain in the Leaps, I know that. But, Where you going to put that money if the stocks continues to go higher? Would you buy the common back? How many times have you done that this year with QCOM? Are you worried now, since your last play in option was loss, and that hasn't happen before this year with QCOM? Why even own the common then, just buy leaps, in the first place? Is it because you think the big gains have been had, and why squeeze the last drop out of QCOM? Or do you believe we will have a big correction near the end of January beginning of February, like I do? Respectfully, Greg

To: Voltaire who wrote (55017)	12/19/1999 10:17:00 PM
From: RocketMan	Read Replies (2) \| Respond to of 152472

That gives me close to twice the leverage I had owning the stock. Not sure if I follow you there. I can understand doubling the leverage in a non-taxable account, but if it is in a taxable account, and say you pay 40% short-term tax, then most of the leverage goes away. For example, selling 100 shares at $450 grosses $45,000, but only $27000 after tax. 60% of that is $16200, enough for one leap with about $4k left over. So now you have one leap and about $15k left, enough for 40-some shares if it corrects to 350. If Q goes back to 450, you make $4k on those 40 shares, but are still down $12k on the leap. Once Q gets to $570 you are even on the leap, and are now playing with 140 shares, worth $67800 after subtracting the cost of the leap. If you had just kept the 100 shares, they would be worth $57000, so the difference is $10800, not insignificant but far from doubling your leverage, plus if the stock does not correct that much, the difference is even less. Maybe I'm missing something, or maybe my numbers are wrong, it's getting late, but this is what I come up with.