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Strategies & Market Trends : Options -- Ignore unavailable to you. Want to Upgrade?

To: Poet who wrote (489)	1/2/2000 12:32:00 PM
From: Neal davidson	Read Replies (2) \| Respond to of 8096

<<Neal, for the benefit of thread members who are learning about options, would you be willing to post the breakdown that led you to see that there's only about $4.00 of time premium left on these LEAPS for the year, and what that means?>> Poet: I really did a very simple mathematical equation. The bid on the 2001 $62.50 is 117 3/8 (as of the close on Friday). If you add 117 3/8 to 62.50, you get $179.875. The closing price on Friday for the common stock was $176 1/8. Thus, the premium is $3.75 ($179.875 minus $176.125). Stating the obvious, this means the leap will be profitable if QCOM goes up more than $3.75 in the next year. An added bonus is that the options are so DIM that we are getting virtually a point-for-point move with the stock. SO...let's say QCOM common goes up 30% next year. The stock will have gone from $176 1/8 to $228.96, a gain of almost 53 points. The leap (which will have no time premium left this time next year) will have gone from $117 3/8 to $166.46, which is a $49 gain and a 42% gain. Thus, with the leap, you are getting additional leverage (here, an additional 40% leverage--the difference between 42% and 30%). Obviously each investor has to make his/her own assumptions. If you think the QCOM common will be lower this time next year, then you will not want to have the risk of leaps. If you think QCOM common will go up another 2000% this year, then you can make a far more profitable trade than buying the DIM leaps. Good luck all.

To: Poet who wrote (489)	1/2/2000 8:43:00 PM
From: quidditch	Read Replies (1) \| Respond to of 8096

OT OT Poet and backs in spasm--don't know if later posts responded, but here's advice from one who, regrettably over the years, knows how to treat: 1- after initial sprain or injury, but before any sign of spasm, apply heat to loosen the muscle/ligament area, lots of fluids and, obviously, take it easy; 2- once spasm has set in, apply ice, ice and ice (cold packs) to the area and rest on your back as much as possible; once the spasm has released a bit, very, very gently start a set of non-stressing stretches only to the point where it begins to feel tight and RELAX THROUGH THE STRETCHES, CONENTRATING ON THE MUSCLE SO YOU ARE IN TUNE WITH IT (e.g., one knee to chest--one side or other will feel easier; leg over knee to rotate torso, etc.--but do not push it if your body is not ready; drink lots of fluids, lots, and once you can begin to increase your range of motion with the stretches, gently, apply alternate heat and ice, always finishing with ice; before you get up from the bed in the morning (or to go to the bathroom to void the liquids your drinking lol) move your knees in mini bicycle motion to "warm up" and avoid sudden strain on the muscle. Hope this helps, Poet, I know what a drag it can be. Don't rely too heavily on the darvocet because you won't know what your back is really telling you. Steve