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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Gottfried who wrote (17590)	8/4/2004 12:07:28 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 95657

I've never heard of option adjustments due to dividends. But what is likely to happen is that the call will be exercised in advance of the dividend, so your profits will really be $1.95 minus commissions. If MSFT makes it to say 30 by Dec, then the option buyer has made better trade than you. Either way, you are only going to get compensated for the carry risk, which is the same as for selling any covered calls. What you could do, and I have not really checked the prices to see if it makes sense, is to buy in the money puts for right after the X-dividends day and sell the covered puts for just before the X-dividends date.

To: Gottfried who wrote (17590)	8/4/2004 7:56:12 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 95657

6:56am 08/04/04 Applied Materials upped at Citigroup (AMAT) LONDON (CBS.MW) -- Citigroup Smith Barney overnight raised its rating on semiconductor equipment maker Applied Materials (AMAT) to buy, citing broad trading trends. "Equipment stocks are losing some volatility relative to the market and other names in technology - essentially converging over time to 'fair value'," the broker argued. "Investors who rely on traditional trough valuation analysis using metrics such as book value will therefore likely miss the turn."