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Technology Stocks : LEGATO SYSTEMS LGTO -- Ignore unavailable to you. Want to Upgrade?

To: A. Wayne who wrote (765)	1/31/2000 9:10:00 PM
From: Chuzzlewit	Respond to of 1138

A. W., I don't try to time the markets. The $24 price is based on a hunch about market volatility through the end of the FOMC meeting. At that price the stock is trading at only 27.6x estimated earnings for the year. Plus, most analysts think it will grow earnings at 40% + per year. That makes it a strong buy in my book. By selling naked puts @ $7 I can effectively buy the stock at $23 ($30 - $7). If the stock closes at $30 or above at options expiration I get to keep the $7 premium. I lose money only if the stock trades below $23. If the stock is selling for less than $30 at expiration, I will be forced to buy the shares. Hope this helps, CTC