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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: McNabb Brothers who wrote (88289)	12/22/1999 2:06:00 AM
From: craig crawford	Respond to of 164684

>> Are you saying if it were not for the taxes on the profits of selling your in the money calls you would sell them now and move to the out of the money calls on MSFT? << Yes, that's what I'm saying. I would take some money off the table. The options are far enough in the money now that there are a lot of dollars sitting on the table. I would like to sell the Jan 100's and Jan 110's and take only a portion (say 25-30%) and switch to out of the monies. Then, if MSFT shoots up another 15-25 points like I expect it to, I still participate heavily in the upside, but 70-75% of my profits are protected and can't be taken away. What would I do with the other 70-75% cash I had from the proceeds? I would put it in MSFT stock on margin, which doesn't worry me one bit. Any other time in the year I would be doing this, but this is late December and I'm hoping if I can hold off from selling the ITM calls I can use a 1/3 of my profits to invest for another whole year before Uncle Sam gets his paws on it. >> If that's the case which in the money calls would you sell and what out of the money calls would you buy with the proceeds and would you spend all the proceeds on the out of the money calls? << I would sell the Jan 100/110 and move into Jan 120-130, depending on how they looked and where the stock was trading at. I would not put all of the proceeds into OTM calls, I listed some percentages up above. P.S. You know another reason why stocks like MSFT/GE are rallying into the new year? Money managers who are scared about people selling right before Y2K want liquidity. Microsoft and GE are some of the most liquid stocks in the market. They can buy these 2 stocks which are breaking out with the knowledge that they could get out in a hurry without taking too much of a hit if need be. If you buy AMZN and the market gets spooked it could drop 10-15 points in one day. MSFT would probably only drop 5 points at worst and MSFT is acting better than most every stock out there now anyway! YHOO, QCOM, ORCL, etc are all acting well, but they are far less liquid than MSFT and they are all far off their bases. That is why fund managers are going to continue to pour $$ into MSFT--it's not too far off it's base and it provides tremendous liquidity in uncertain times like these.