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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: Tito L. Nisperos Jr. who wrote (38366)	10/19/2000 10:08:31 AM
From: Tito L. Nisperos Jr.	Read Replies (1) \| Respond to of 70976

To All, AMAT may have already Bottomed at 40 1/2 yesterday. The decline thus far is -64.78% --- a bit worse than the -63.68% registered in 1995-96 Bear market. If a new Bull Market is now underway, then we might as well relax and enjoy the ride. We Bulls have been averaging our longs down; I bet the Bears have to average their Shorts Up this time. A friend posed some interesting questions about AMAT LEAP investing. I want to share with you fellow AMAT LEAP Investors my own opinions on them: --- RE "As the LEAP gets more and more in the money, I would assume it gets harder to sell because it's expensive for the buyer…" A Money Manager (who invest his clients money) once told the AMAT Thread that LEAPs are not as liquid as stocks. It's harder to fill up like if you order to buy 10 calls, sometimes they fill it up in 2 call increments. So, plan that you can sell them little by little as the stock nears what you think is the Top; If you look at a graph you can see the stock doesn't stay long at the Top. RE "At what point do you sell the option assuming you are not sure which way the underline stock is going?" When you are undecided, maybe sell half then sell again some more as the stock goes up some more.You can always buy back or buy a longer term LEAP as replacement if the stock goes into a profit taking mode and you think the stock is going to still resume its upward movement afterwards… Here's a Tip based on my studies of the Behavior of Things: --- AMAT goes Up from early fall like Oct (especially in an Even year like 1996, 98, 00) to Feb or Mar or Apr in the following year, followed by Profit taking that last several months then another Upward movement till Aug to Oct or later. You may want to read this Post explaining in a Humorous way (just read between the lines) how things behave in a given situation: --- Message 14485602 RE "when you do sell and replace with another LEAP option, how far out of the money do you consider safe to buy, assuming you are convinced that the stock has bottomed." I usually buy LEAPs that are not too far out the money so I can trade them as I trade stocks. If AMAT should bottom at 40 1/2 (as of yesterday) Jan 2002 50 and 60 Calls are more appealing to me. But it's up to you, remembering that it takes less money to invest in out of the money LEAPs.