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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Mark who wrote (14935)	11/21/1997 11:59:00 AM
From: Greg Jung	Read Replies (2) \| Respond to of 50167

Mark, re: IBM options Why be so complicated, and why avoid any rally payoffs? After today you will be free and clear, long Jan options,right? I don't understand why you are so concerned about lowering the premium paid, if stocks drop again you are out everything, anyway. If IBM goes to 112 (a 6% move) your options will be worth $9 but you won't be able to sell them without buying back the $7 Dec115 options. 1) Next friday maybe just sell options 1 hour before closing. Should be a good rally met by a sell-down on monday. 2) Stay long and uncovered and look for a big payoff day, sell at least half and buy some April puts near the end of January. Greg

To: Mark who wrote (14935)	11/22/1997 2:52:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Mark- IBM calls The reason I suggested 1.5 time 1 was based on net returns to you if IBM various situations are considered - yes higher elemnt of risk but recouping higher prmiums also suppose IBM moves upto 115- you have nothing to worry as calls expire worth less if IBM is at 116 you break even of naked calls or a loss of quarter but your Jans will be 7 $ intrinsic plus time- a good return over your present level- 118 is point where your 10 long calls will be 9$ and naked 115 15 calls showing a loss of 2 $ assuming a $ has been collected- now even then you are alright you will sell Jans for 9000$ and buyback 15 at loss of 3000$ your net would be 6000$- price of the call, if you sell now you have far less profit. Higher contained risk but potential is higher too. In my opinion odds of IBM runnig upto 118$ is the choice you have to make.With all this your cost basis becomes far better and you have clean run for the earnings -please check if your calls are expiring IN jan after or post earnings if post, this is very important. You should have comfort of earning play in ling calls.