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

To: Jean M. Gauthier who wrote (8056)	8/2/2000 8:03:43 PM
From: Bridge Player	Read Replies (1) \| Respond to of 8096

Jean, it is my understanding that option holders are not normally entitled to benefits that will accrue to the holders of the common stock, in buyout situations. I believe that you are a Canadian resident, and I am not familiar with their tax laws. If there is no benefit to be gained by having a capital gain be long term as opposed to short term, then you would have no benefit to exercising early so that your holding period of the stock would reach 12 months sooner. However, if you want to share in the McData spinoff, then you first would need to determine whether, as an option holder, you would be eligible. If not, then you probably need to exercise your leaps, in spite of interest costs, in as timely a manner as possible so as to be eligible to participate. BP

To: Jean M. Gauthier who wrote (8056)	8/3/2000 3:09:11 PM
From: Tom K.	Respond to of 8096

Jean, I think that Bridge Player gave you a more well rounded response. I was simply responding to the question of obtaining the McData spin-off, i.e., your need to own the shares. Regarding the interest cost on the funds if you exercise, I assume that you currently have collateral requirements now that should be close to the margin needs for the exercise. Therefore, interest should be a minor factor in the equation . However, it's wise of you to consider all aspects. BP's point is well regarded.... take what the poster's write (me included) with caution. By the way, back in the mid 70's I lived off the Queensway out toward Kanata. Loved Ottawa. Tom