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

To: Jill who wrote (56513)	12/23/1999 6:27:00 PM
From: RoseCampion	Read Replies (2) \| Respond to of 152472

What is the advantage of your broker doing both at once? Jill, it's simple insurance. The advantage is that you are effectively "guaranteeing" the price you are going to do the roll for, by asking your broker to perform the two separate transactions simultaneously. It's the option spread equivaltent of a simple "buy limit" order on a stock purchase, specifying your maximum price to perform the transaction. The reason this is done is that there's no possibility that, between the time you sell your old options and buy your new ones that the price of the underlying equity will spike upwards and cost you additional dollars to get into your 'rolled' position. The alternative is to sell your old options and hope the price falls before you buy your new ones - clearly a more risky, though potentially more lucrative, bet. Or you could specify separate sell and buy limits on both sides (ie, a separate bid for the sale and ask for the purchase, rather than a total debit), taking the chance that one of these transactions will go and the other won't. More options posts follow. -Rose-

To: Jill who wrote (56513)	12/23/1999 6:29:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 152472

The transaction costs are the sum of the commissions for the sale and the purchase. No savings. In your example you assume Rick (or anyone) can predict a top and a bottom. Imo, no one can. If you guess wrong on a volatile stock like Q it will cost you big bucks. Spread transactions are done to specifically avoid having to make that gamble. uf

To: Jill who wrote (56513)	12/23/1999 7:20:00 PM
From: edamo	Read Replies (1) \| Respond to of 152472

fly girl...re: tops and bottoms.. no advantage to rolling out any long option positions...costs the buyer to roll....increases risk by adding to cost basis if exercised. short positions may have an advantage, and placing a spread order is less cumbersome then separate transactions...but it is all relative, a spread is fixed...just guaranteed...but most important cash in, decreasing risk by lowering cost basis if assigned or called. your long should be closed at a top, and a new long bought at the bottom...you have it correct....short position the opposite murray xmas.....