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Technology Stocks : Qualcomm Incorporated (QCOM) -- Ignore unavailable to you. Want to Upgrade?

To: waverider who wrote (76374)	7/12/2000 1:57:51 PM
From: luther yow	Read Replies (1) \| Respond to of 152472

look's Like the prices are going up again. Does anyone think we have seen the bottom. Luther

To: waverider who wrote (76374)	7/12/2000 2:44:41 PM
From: PAL	Read Replies (1) \| Respond to of 152472

Rick: Good move! You don't have to lock that $ 45K to cover your naked 10 puts jan01/45. As a matter of fact you got paid 6 7/8/share. To be the most conservative, you only need $ 37,125 to cover (the remaining $ 6,875 is from the proceeds of that option). The margin requirement is 20% of underlying stock (now at 58) = $ 11.60 minus out of the money ( $ 13) gives you a negative amount, hence use the minimum required: 10% of the underlying stock which is $ 5.80 plus current premium $ 5.50 = $ 11.30 Times 1000 shares = $ 11,300 which is required by the broker. Go further: $ 11,300 minus $ 6,875 = $ 4,425 your own money. Now in 5 months that option is worthless (hopefully), you keep that $ 6,875. Let us calculate the return: $ 6,875/$4,425 times 100% = 155% return for 5 months which is equal to annual return of 372%. Not bad. Caveat: I have only presented the potential, but there is a substantial risk involved. You need to do this on a dynamic stock like QCOM, and have the capacity to be assigned. Don't do it on a stock like RiteAid. Paul PS Why would you think that Mucho put you on ignore?