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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (3091)	10/20/2000 1:59:28 PM
From: Kayaker	Read Replies (1) \| Respond to of 3951

I have also read caution against buying deep ITM, where you tie up a lot of capital in a small number of calls, I like them as a "replacment" for the stock. In many cases I would prefer to be more conservative (and avoid the spread and the lower liquidity) and buy the stock instead but it messes up my long term position. For example I have long term AMCC shares. Last week I bought 10 AMCC May 120 calls for 70.00. This morning I sold them for 95. If I had done this short term trade with shares, I would have had to use (as a cost base) the average cost of ALL my AMCC shares (canadian rules). So I would be forced to report a much bigger profit than I actually made. I find conservative calls as a great way to avoiding this. Heck, I would have done this 1 week trade with DIM LEAPS if they were available. I've just been burned too many times when the market heads down for an extended period and I run out of time. Back in '98/99 I was often 100% in Dell calls. Early Feb '99 stand out in my memory.