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Technology Stocks : Extreme Networks, Inc. (EXTR) -- Ignore unavailable to you. Want to Upgrade?

To: minorejoy2000 who wrote (385)	10/20/2000 6:15:12 PM
From: Sully-	Read Replies (1) \| Respond to of 770

Hi minorejoy2000, First, I am not seasoned enough to attempt to give options advice of any real value. Same could be said for my investing opinions too I guess. Please take my comments with rather large grains of salt........... RE: EXTR...... have you read these?? Message 14618706 Message 14624116 Also check these recent posts on EXTR from a guy I trust...... Message 14603663 Message 14612158 Jim & I have discussed EXTR over the phone too. He's pretty good at TA & does good FA on his investments. He decided to trade out of his positions when the second top failed. He is bullish on EXTR after a bit of consolidation & plans on re-entering then. FWIW, I am bullish in EXTR....... just concerned that there may bit of backing & filling before it ramps........ again..... I will use any near term runs to complete my selling of Dec calls & use pull backs to start my buying of Mar01 calls..... FWIW, I am completely out of my Dec $100's today..... only Dec $80's left & I hold a few Mar $120's now..... I don't see EXTR making new highs in the next couple of weeks, all things being equal........ I don't see EXTR breaking down badly (mid/low $80's??), again all things being equal...... we could see it test lower support levels though (upper $80's maybe, but low $90's is what I see right now)........ RE: Options....... I'm not trading large amounts of options like some folks I converse with on these threads..... What I am doing is selling call options I bought earlier...... Dec $80's & Dec $100's. These are contracts with the right to buy the underlying security at a set price anytime prior to the expiration of the contract...... One option contract gives you the right to control 100 shares of the underlying stock at the strike price........ The strike price in my case is $100 & $80 (see above)..... For this right, I pay a premium..... The premium is reflected as $x.xx/per share on each of the 100 shares in each contract...... Example..... The EXTR Dec $80 contracts were bought at $16/share, or $1,600 per contract....... you need to study options premiums before you start to get involved in this........ It is not a hard concept, but I could not do it justice in a paragraph or two either. Evidence of my inexperience at options trading can be seen in my trading the Dec $80's I bought at $16/share..... Both times the stock made new all time highs, I had the opportunity to sell my contracts for $48+ per share & did not..... I still have a nice paper profit in these contracts, but nothing like it was just a few days ago :-( Now, time is eating away at these contracts....... if EXTR bases..... or heaven forbid goes south............ DOOH! I don't have time to make it up......... I want more time..... Rather than exercise the options contracts & take possession of the stock at the agreed upon or strike price ($100 & $80); I am trading the options contracts..... or buying & selling the options contract much like you buy & sell stocks. Evidence of my inexperience at options trading can be seen in my trading the Dec $80's I bought at $16/share..... Both times the stock made new all time highs, I had the opportunity to sell my contracts for $48+ per share & did not..... I still have a nice paper profit in these contracts, but nothing like it was just a few days ago :-( Now, time is eating away at these contracts....... if EXTR bases/consolidates for weeks..... or heaven forbid goes south............ DOOH! I don't have time to make it up......... I want more time..... The reason I am rolling out to the Mar01 series, is due to time......... The premium on options contracts decay with time for one. Time is also critical if you want to take advantage of the strength of a stock that has strong fundamentals.... Look at how EXTR got pasted even though they had strong numbers & even guided revenue estimates upward......... With the Mar01's I have more time for EXTR to start reflecting those improving fundamentals....... As Dec approaches, another pasting will not allow me time to let it get back on it's feet again. Since I am bullish on EXTR overall, yet concerned about very near term consolidation/downside, I want more time, plus I want to lock in profits....... BTW, I did sell 1/3 of my EXTR calls prior to earnings just to play it safe. Please keep in mind that this is really basic... there is so much else that should be discussed...... using stops...... intrinsic value........ front month, near term & long term calls..... LEAPS........ in the money, at the money & out of the money.......... delta.......... risks of complete loss of premium.......... selecting appropriate strike prices for your personal risk tolerance & investment strategy......... etc., etc., etc. Hope this helps more than it confuses :-\| Ö¿Ö