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 : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: freeus who wrote (4209)	9/28/2000 12:14:57 PM
From: im a survivor	Read Replies (2) \| Respond to of 65232

<<Replacing stock with calls: I've been doing the same thing, only I've mostly replaced with LEAPS (have some Nov and Jan RMBS calls and Jan Intc calls and few Feb-Mar NTAP,ITWO and Newp calls)... >> I like that approach as leaps give the market ample time to do it's thing, and for the most part....over time, the market has proven...so far anyway.....that over time, it goes up. The problem with leaps is this....they are pricey. My intention is to say sell 100 shares of stock abcd and replace with 1 or 2 calls and eliminate margin. E-Trade does not count Calls as part of portfolio Value, therefore, lets say I sell 100 shares of qcom for 70 and buy an 03 leap for $35. I am actually hurting my margin. I subtract $7k from market value and $7k from margin, but then I add $3500 right back onto margin with the buy of the leap. In essence, to make this work, I need to stay in calls that are cheaper. For instance, yesterday I bought QCOM Jan 70 for 14 1/2 and jdsu March 100 for 18 3/4. Both are currently atm or pretty close to it. If we do rally, I would assume the calls will mimic the stock movement, yet I am not nearly as leveraged as I could be. My big fear is that the market stays in this funk and I lose my ass on the calls........but for now, eliminating margin is of more importance. I am trying to hold a mix of stock and calls that I feel will do well. Currently I am about 35% on margin. I could eliminate that completely by selling one or two stocks and replacing with calls, but for now, I am going to kind of sit tight and see what happens first. I do not wish to sell what little of sunw I have left. I prefer to hold the rmbs I have and qcom as well......I thought about selling jdsu, but not under $100.........enough rambling for now. My calls are QCOM Jan 60 and 70 JDSU March 100's SSTI Jan 30's and 35's Intel Jan 50's and 77.5's ( Both purchased when intel dropped to about $48) AOL 2003 leaps $40 strike I hope all the above calls are relativey safe. My next move, if any, would be to sell JDSU shares and convert to more of the march calls, and maybe sell qcom and replace with another couple of jan 60's or 70's. This would eliminate most of my margin, but it would also expose me to more calls which can be risky. Comments from anybody would be appreciated. Keith@mindblank.com