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Technology Stocks : 3Com Corporation (COMS) -- Ignore unavailable to you. Want to Upgrade?

To: David E. Taylor who wrote (43906)7/14/2000 9:02:14 PM
From: kcmike  Respond to of 45548
 
David,

(Or any other options players out there)

While there are rarely any "free lunches" in the market, like if you could have shorted PALM and bought PALMV, let me run this play by you.

Best I can tell, todays closing spreads were:

PALM - 44 11/16 x 45
PALMV - 40 7/8 x 41 3/4
PALM NOV 70 PUT 28 1/8 x 28 7/8

Lets say we can skim just a little off the ask, and buy:

PALMV at 41 3/8
PALM NOV 70 PUT for 28 5/8

If that could be purchased, would your maximum loss not be strictly the price of commission paid?

So if you are one that thinks that PALM will be over 70 by November or December, this would be a low-risk play, with at least a small chance for profit?

Of course, you have to tie up quite a bit of funds.

Just curious of your thoughts.

Thanks,
Mike



To: David E. Taylor who wrote (43906)7/14/2000 10:06:55 PM
From: JB  Read Replies (2) | Respond to of 45548
 
Even though boat is loaded with coms.....could not resist gorging on comsv @ 12 7/8. Cannot conceive of significant (long term) downside.....in view of a possible 20% kick (15.75) within weeks....a ringer for 50%+ (20+) within 12 months .....with reasonable expectation of a freebie of 100%+ (25+)within a year or so.

Where's the trap?.....dilution of employee options?

Appreciate your opinion.....& congratulations to you....and the faithful!!

JB


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