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

To: Uncle Frank who wrote (5810)	3/31/2000 10:29:00 AM
From: Jean M. Gauthier	Respond to of 8096

Thanks Jean

To: Uncle Frank who wrote (5810)	3/31/2000 12:33:00 PM
From: RocketMan	Read Replies (1) \| Respond to of 8096

Picked up some EMC July 130's, they looked pretty juicy at around 14. Also got some Csco July 80's for around 9 and change.

To: Uncle Frank who wrote (5810)	3/31/2000 1:34:00 PM
From: Bridge Player	Read Replies (1) \| Respond to of 8096

I like a CISCO diagonal option spread using puts here. You can buy the July 50 puts (CWYSJ) and sell the May 60 puts (CWYQL) for a very small credit, at least 1/8 to perhaps 1/4. IMO the May puts are likely to expire worthless, leaving you with a "free" position in long July 50s, and 2 months remaining for potential profit from volatility as the techs enter their dull period in spring and early summer. There is no risk on the upside. On the downside, with Cisco trading around 75 at this time, I would begin to get worried if the stock dropped to 65 for any reason. As the short 60s get close to, or worse in the money, the spread goes negative against you fairly rapidly. It would seem the major risk is a negative surprise on earning announced early May, something that rarely happens with Cisco. For confirmed bulls on the stock (I am not one) this seems like a reasonably low-risk play with some profit potential, the stock only needing to stay over the 65-66 range for the next 7 weeks. BP