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To: Johnnie Memmonic who wrote (76004)	7/9/2000 4:01:25 PM
From: Ibexx	Respond to of 152472

If you are set up for it, it might be just as advantageous to write puts than to buy calls, LEAPS or otherwise, as the premium for volatile stocks (such as QCOM) is extremely high. Check Black Scholes equation - there are some simplified versions of this, but all incorporate the volatility parameter. Ibexx

To: Johnnie Memmonic who wrote (76004)	7/9/2000 4:37:42 PM
From: Uncle Frank	Respond to of 152472

>> I am a Q investor since '95 and have not sold my original position yet Then your cost is between 4 and 6. Anybody who dares to give you advice on portfolio management needs to have their head examined. >> Can anyone advise which option (LEAPS) will be the most cost advantageous? There are two things to consider - time and strike price. TIME: The advantage of LEAPS is time is on your side. Since it may take a bit of time for Mr. Market to "get it", I'd go for the 2003 expiry series. Fortunately, thanks to the way the premium is computed using the Black Scholes equation, the price for the extra year is a bargain. WIJAT (2002 100s) were offered at 12 5/8 on Friday, while VLMAT (2003 100s) were offered at 19 1/8. You can buy 12 extra months for a mere 6 1/2. Note: Unless you plan on exercising, Roth advises LEAPS should be sold 6 to 9 months before expiry, since you will be able to recover a portion of the time premium as well as their intrinsic value. STRIKE: The higher the strike price, the higher the leverage. The rule of thumb is, Buy in the money as a stock substitute. It's the conservative play. Buy at the money if you're bullish. Buy out of the money if you're very bullish. Buy far out of the money if you're totally convinced. uf

To: Johnnie Memmonic who wrote (76004)	7/9/2000 4:58:13 PM
From: tekboy	Respond to of 152472

<<Can anyone advise which option will be the most cost advantageous?>> Although Frank's already said something similar, let this options relative newbie pass one thing he's learned. You can't really compare the "cost-advantageous-ness" of most options in the abstract, since what they will ultimately return depends on the extent and timing of the the underlying common's movement. That is, something that looks very costly under certain assumptions might look cheap under other assumptions. So, far more than with buying common stock, in buying options you have to start with fairly specific guesses of what you expect the stock to do, over what time frame. tekboy@thenwatchyourcallsexpireworthless.com PS BTW, check out Jacob Snyder's discussion of buying Q LEAPS above, which makes a similar point.