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

To: freeus who wrote (61303)	1/10/2000 4:00:00 PM
From: Kayaker	Respond to of 152472

what difference does it make if you do that early in the options life or later? It's never a good idea to exercise before the day of expiration. Just ask yourself what you gain by exercising early. The answer is: nothing. What you lose is the use of the money (you purchase the stock with), and the ability to change your mind (if company or market factors change), between the time you exercise (early) and expiration. (Note: There are obscure dividend and arbitrage situations where exercising early might make sense.)

To: freeus who wrote (61303)	1/10/2000 4:26:00 PM
From: waverider	Read Replies (2) \| Respond to of 152472

Having never exercised an option before...let me work through some numbers here... I own some 2001 $40 LEAPs. For discussion sake, let's say I have 10. On January 1 they were worth about $137. The stock was at 176. EVEN. To buy 1000 shares of Q via exercising, it would cost me $40 x 1000 or $40,000. OK, so I want to exercise them. I don't have any money to do so...therefore I must sell a few. Hmmm...so I sell 3 of the LEAPs and get $41,000 The remaining 7 LEAPs I exercise...costing me $28,000. So now I have $13,000 left over and 700 shares of Q. What do I do with the $13,000? buy more Q?...that would get me 73 shares. TOTAL is now 773 shares of Q... WHEN I USED TO HAVE 1000... Now unless you need the $13,000 to buy Rick a present or a night's worth of tequila, it would be silly to exercise your options IF the stock remains flat line until expiration or goes up. IF the stock goes down or crashes, then of course you shoulda, woulda, coulda... I hope this makes sense. You basically are reducing your leverage...unless of course you could buy more LEAPs with that $13,000...but I don't think you could with that amount of money to make up for what you are losing. Love Rick Option

To: freeus who wrote (61303)	1/10/2000 5:20:00 PM
From: Jim Willie CB	Read Replies (4) \| Respond to of 152472

"its never a good idea to exercise options early" most of time, true, but not when option premium fully decayed if wicked deepinmoney, then early exercise does not forfeit any option premium (since there aint none left) early conversion to shares allows for prudent hedging thereafter it also releases massive margin buypower kinda wish I had done some hedging this past week but then again, one can easily hedge deepinmoney calls by simply writing calls against calls, instead of shares just sells away rights beyond given upper price couldve covered written calls late last week the hedge becomes a bull spread option just a thought hey, nice close we have dealt partially with nettlesome 160 level 160 now becomes as resistant as it was supportive on way down it served reasonably well on three occasions on way down / Jim Willie