Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Uncle Frank who wrote (27716)	7/11/2000 11:19:52 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

From that conference call, about the merger: Henry expects to hear "within days" from the government if there are any concerns. If there aren't, the merger can be closed "within days" after hearing from the government. If the government has concerns, Gemstar is open to negotiate or sue. The company is very firm in their belief that there is no legal justification for preventing the merger. About the contingency agreement: Gemstar would get "the lion's share" of the TV Guide's licensing revenue that falls under the auspices of the contingency joint venture. For all recurring revenue, Gemstar would get half of it. --Mike Buckley

To: Uncle Frank who wrote (27716)	7/11/2000 11:21:02 PM
From: A.L. Reagan	Read Replies (1) \| Respond to of 54805

Spreads are hard to execute. I have a spread on the QCOM Jan '03's. The good part is minimal risk - both in terms of the smaller initial investment as well as what happens during periods of price declines. The bad part is that one has kinda sorta converted an American style option into a European style option because, barring both legs being deep in the money, until you get fairly close to expiration the top leg on a bull spread still has a ton of premium, which the bottom leg doesn't have. (A European style option for those not familiar with the term is essentially a bet on the price of the underlying at expiration, not any day in the interim.) So on the 60-140 '03 spread, if say Q went to 120 by 12/00, the premium on the 60 will almost disappear, whereas the premium on the 140 might be nearly the same as the day you wrote it. So, you'd be saying "look how smart I am to have gone long, how come I haven't made much money doing it (yet)?" Brokers will take a limit spread order, but they have to be called in daily, and getting a decent execution, given the bid/ask spread on both legs, isn't easy. But it is certainly a valid strategy, and IMO beats just plain buying ATM or ITM calls. Buy value, write premium has a certain degree of validity.