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

To: SecularBull who wrote (7819)	5/23/2000 11:39:00 AM
From: JohnG	Respond to of 8096

To: Ruffian who wrote (72194) From: JohnG Tuesday, May 23, 2000 11:25 AM ET Reply # of 72200 Ruff. QCOM Chipset shipments analysis. 1) Thru 9/30/2000 from Ruf's 10K exerpt---65MM 2) From 4/18/2000 Conf Call-Q1, 2000 (ending 12/31/99)-14.5MM 3) From 4/18/2000 Conf call--Q2, 2000 (ending 3/31/2000)--11.2MM 4) From 5/23/2000 QCOM announcement, Cumulatic\ve total shipments to date---100Mm 5) Thus, shipments from 3/31/2000 through 5/23/2000 must be (100 -65 -14.5 -11.2)=9.3MM 6) From 4/18/2000 Q had projected shipments in Q3 to be more than 14.5MM Thus Q's ship rates are above target because in 1.74 months they have shipped 9.3MM or 5.34MM per month. If this rate continues, they could ship 16.0MM chipsets in Q3. This ammounts to shipping 16% of all the CDMA chipsets ever shipped in just one quarter, and should produce blow out earnings unles there is some offset we know nothing about. At this point, I would suggest taking a look at July and Oct calls before the market tumbles to the reality of this announcement. JohnG

To: SecularBull who wrote (7819)	5/23/2000 12:03:00 PM
From: Bridge Player	Read Replies (3) \| Respond to of 8096

Here is an option play for LTB&H players with lots of patience. I believe it has a very high probability of a low-risk double after 20 months. Microsoft is down roughly 50% from its highs as a result of the lawsuit uncertainty and the technology weakness. The MSFT Jan 2002 60 Leap call is 18 1/2 bid. The MSFT Jan 2002 70 Leap call is 13 3/4 asked. You should be able to put on a bull call spread for $5 or less, half of the $10 spread. If you are willing to gamble some and attempt to leg into this spread by buying the long side first and waiting for a rally to put on the short side, you can probably put it on much cheaper, and possibly at no cost at all. Within the last 10 days the 70 call was 18 1/2 asked. Note that with stock and option price volatility these prices can change literally in seconds. Two cautionary notes. One, this kind of play is grindingly slow in realizing its full potential, which does not normally occur until close to expiration. Two, it is extremely likely that the short side will go significantly into the money well before expiration, and you would thus be subject to an early assignment. If that happens you just need to also exercise your long call to get the full profit potential. With these caveats, I think that the probability of MSFT being over $70 in January 2002 is at least 90%, giving odds of 10-1 or better for a double vs. the loss of all of your investment. Edit: MSFT trades around 64-65 at the approximate time of this posting. BP