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

To: Zoro who wrote (839)	2/13/2000 3:30:00 PM
From: Chuzzlewit	Read Replies (4) \| Respond to of 1138

Thread, For those interested in this sort of thing, I just calculated the implied volatility for LGTO call options. The volatilities are clustered around 92%. This compares to historic volatilities which averaged around 67% for the six month period ending December of 1999. A covered call play looks intriguing for people wishing to mitigate their risk. For example, The June 40s are selling for 5 11/16 (mid-point between bid and asked), which would yield the net cost of establishing the cc position of $29, and with a 0 price change between now and June a profit of 19.6%, which annualizes to 68.7%. And if the stock price rises to above $40 by options expiration, the profit rises to 37.9%, or 155.7% annualized. TTFN, CTC