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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: jjstingray who wrote (51159)	4/14/2002 7:45:54 PM
From: Zeev Hed	Read Replies (3) \| Respond to of 99280

I think you are indeed crazy. When does QLGC report? Next week or the week after? It will be kept at least in the $42/$50 area until that report, and if it is positive, watch out, another attempt at the $56/$60 before it starts its decline. Unless we indeed get a collapse here in the next two weeks, and QLGC disappoint (it did not on the last report), you have a chance of seeing $35. The May Max pain (for May) is currently at around $50, not in your favor, and at worst, $45 for next Friday. Last, QLGC is the strongest stock right now in the Q. I think you would be gambling $4000 away. BWTHDIK? Zeev

To: jjstingray who wrote (51159)	4/14/2002 10:45:39 PM
From: The Freep	Read Replies (1) \| Respond to of 99280

jj -- just to throw my 2 cents into the QLGC puts question. . . you write <<QLGC sells its products to IBM.>> Well, IBM isn't one of their big customers, actually. Nor, for that matter, is EMC, though QLGC sells to both. IBM supposedly makes up 25% of EMLX sales, though I haven't broken out the numbers myself to prove it. But the % is nowhere near as high for QLGC. Do a little digging on the QLGC site and find their biggest customers. . . and then break that down into which PART of QLGC's biz it is (iSCSI, HBAs, switches, etc.). IBM should hurt them much in specific (though it clearly points to an industry that ain't rocking). On the flip side. . . QLGC actually doesn't report earnings til May, so they're in a "rumors move the stock" phase, and any warning in the storage area would probably hurt them. Then again, decent earnings in that space could do for them what MERQ did for software stocks. Also, the odds of QLGC warning are pretty slim as, historically, their management is extremely conservative and doesn't put itself in position where it has to warn. There's no question QLGC could fall a ton -- it hit 17 in September of last year. That said. . . unless you think the market is totally tanking here, then May 30 puts seem like a rather large risk (akin to betting on the Red Sox to win the World Series <g>) the freep

To: jjstingray who wrote (51159)	4/14/2002 11:49:33 PM
From: ajtj99	Read Replies (1) \| Respond to of 99280

jj, I would not recommend options on a high delta stock like QLGC. It is extremely difficult to make money on them even if you get direction and timing right. Furthermore, extreme, out of the money options are cheap because they are speculative and very rarely pay off. There is a reason they seem to be "on sale." When QLGC does break, if you want to make money you would probably do best to short it rather than get puts. If it does test the lows there is still plenty of downside. If you short it with a decent stop, you will mitigate your losses. If you have the will to hold it until its eventual pay-off on the short, you may profit handsomely. Anyway, that's my take. Sometimes we have to pinch ourselves and keep our greed in check, as that's what the MM's play upon.

To: jjstingray who wrote (51159)	4/15/2002 1:49:23 AM
From: jazzcat2000	Respond to of 99280

jj, I don't know that anyone would take my advice but I'll offer it anyway. If you decide that you want to buy puts on whatever stock I'd recommend that you buy "more in the money". In you example on Qlgc about buying May 30's with an investment of $4,000, I'd suggest looking at the May 40's or even more in the money. A $4,000 play will buy a lot less contracts but it will greatly reduce your downside, yes and limit your upside. In your example,if you want to have a higher upside, I think a better play would be to invest more dollars, 6-8K, in deeper in the money puts.