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 : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: mthomas who wrote (3707)	12/21/1999 10:25:00 AM
From: TechMkt	Respond to of 15615

PC-1 is open for business!!! We're up over 2 this morning. I think yesterday's drop was the last chance to get in at the low 50's. This is a must own stock for 2000. Fez

To: mthomas who wrote (3707)	12/21/1999 2:44:00 PM
From: Brent Hogenson	Read Replies (1) \| Respond to of 15615

No, you're not missing anything. Remember we are talking about the worst case scenario. And we were talking about this when the stock was $55, so the premium was only 10% at the time. If the stock is at $50 when the options expire you can do one of two things; admit you're wrong and take your lumps or write the 70 puts a year out from there and use the money to buy $50 calls. Eventually you will be right or you will have to take your lumps. There would be no margin interest and my transaction fees are only $8. You don't want to do this with a stock that is likely to stay flat or go down. Let's talk about positive scenario now. The stock goes to $100 and splits and ends up at $65 at expiration. Your average cost is $25 for 2000 shares (split adjusted) you make $80,000. Every investor has a different comfort level. I have no problem writing puts in the money and using those $$$'s to buy calls deep in the money on stocks that I think will appreciate dramatically. When I originally wrote the $30 puts my maximum risk was $30,000. I am already ahead of the game over $30,000 per 10. What does that say about risk vs. reward. (current price $54.5 - 25 = 29.5 in the money + .75 (the $$ I put in my pocket)) Investing is risky, using my technique adds $5,000 more risk to each 1000 shares, however the returns are so much greater.