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

To: VinWood who wrote (11099)	11/14/1997 7:06:00 PM
From: Tito L. Nisperos Jr.	Read Replies (1) \| Respond to of 70976

Vince, Michael should replace the LEAP 5 to 6 months or even more before it expires as it has time premium left. He should switch at a time when he thinks the stock is already high---from Apr to Aug; the higher the price of the underlying security, the cheaper the switch to an Option that have additional 1-year life in it...For AMAT, the time to switch is before the Earnings report in the middle of Aug of each year---the stock tends to drift downwards from Aug to Nov and at times to Jan of the following year...

To: VinWood who wrote (11099)	11/14/1997 7:41:00 PM
From: Michael R	Read Replies (1) \| Respond to of 70976

Vince, And I could loose the treasure even faster than I discovered it. I think for a portfolio heavily weighted in leaps or other more risky derivatives, it's crucial to use some method to protect yourself (myself in this case) from the unexpected. My broker, T Rowe Price, said that they could put in a stop loss order - but setting a stop on a LEAP would require a little more art than would be needed for stocks. I am wondering about hedging methods buy a leap put for each call or write a 2000 and invest the premium in the 1999. I don't know the best method yet, I want to keep it fairly uncomplicated. Right now, my rule is if something should happen to make me ask 'Would I sell the stock?' - I will surely leap from the LEAPS. Michael

To: VinWood who wrote (11099)	11/14/1997 8:00:00 PM
From: tony sidhu	Read Replies (1) \| Respond to of 70976

COMS JAN99 leaps are NOT selling for $.50 But $4 according to tradepbs site. Can someone clarify this.

To: VinWood who wrote (11099)	11/15/1997 9:45:00 PM
From: Lee Penick	Read Replies (3) \| Respond to of 70976

Regards - Re:"this could be an astronomical amount of $$$ after just a few cycles" Looks like you've discovered the Treasure of the Sierra Madre. Take a look at the COMS LEAP for Jan '99,strike $50. In July people were paying $14 for it. Today you can buy it for $.50. Do you think it will recover by January so you can roll it to the '99 for $10? If I was you I would check how many LEAPS expire worthless before I got too excited. vince, I'm glad someone finally said this. You could buy a one year leap for 33% of the stock price if it is at the money. That is an expensive gamble, may work, or you may lose it all and then not even own the stock! I have a hard time paying 33% for an option. I think I would rather buy it in the low 30's, and sell a leap at 40. Make a nice premium and get a nice capital gain if it gets called at 40! I won't get rich....well at least not the first year or two. Bears make money, and Bull make money, but Pigs,.....you've heard it before, I'll spare you. Lee