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

To: Mark who wrote (14951)	11/21/1997 6:02:00 PM
From: Greg Jung	Respond to of 50167

re: IBM options 1st Remember I'm just making off-the-cuff suggestions, it just seems you're getting very incremental compensations. IBM is the only thing close to a "market representative". Especially retail investors like it as a relatively safe tech representative (although I disagree with that interpretation) friday after thanksgiving the smart-arses are gone and everybody is home and the technicals are good (according to local market-timing gurus) so short-term rally could peak then - and of course it would be promptly sold off the monday after. Basic aspect of my pov, your strategy doesn't seem conservative because by writing calls the reward is limited and it locks you into the position (value for sale of 110 drop faster than buy-back of the 115). IBM could be stuck in the mud at $90 today and you'd have nothing to do about the calls. Or, it could go to $120 and your position would be worth about $3 unless it closed above 115 when the premium on the short call came down - to get the full $5 you have to be winning on expiration day. Greg

To: Mark who wrote (14951)	11/25/1997 7:16:00 PM
From: Greg Jung	Read Replies (1) \| Respond to of 50167

Mark, I was timed out while composing my response, sorry this is late. Basically the point about Fri after TG, if the market has a positive spin this will be a rally day for retail investors, and IBM is their favorite, but it really doesn't support a price too high so next monday it will be taken down. I think latest up move is buying in advance of the "thanksgiving effect" - no more, no less - otherwise the price action of the stocks I might buy look rather dangerous. I am a little gunshy because I've stuck my neck in a margin guillotine and can only use whats left for "sure" quick trades. Intermediate term I don't know where IBM will be - they could come out and estimate an earnings shortfall - but it is as solid as anything despite the widespread lukewarm opinion of it. The "expanding PE" hypothesis will be on hold for a while but the very low interest rates allow them to do their financial games to boost the bottom line. Greg