Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: JT who wrote (11392)	1/7/1998 5:12:00 PM
From: Sowbug	Read Replies (1) \| Respond to of 77400

Warning: long-winded but happy fish story below. A funny thing happened to me in the last few weeks, and I thought I'd share with the thread. A while back I bought one Jan 80 call contract @ 2'15, before the 12/17 stock split. $80 is $53.33 post-split. A few days ago I sold the contract for $6 for a gain of 3'1, and it was only when I got my trade confirmation that I remembered/realized that I now owned 1.5 contracts for every presplit contract, so it was really a gain of 6'1. That filled me with glee. This was my first option trade ever, and in retrospect it all seems to make sense, but I wonder whether it's possible that some dumb-asses like me didn't truly comprehend how a stock split affects option pricing. As I followed the option price throughout the days, it never seemed like the option price dropped to conform with the equity price; the option symbol/root changed (from CYQAP to CYZAX); and the option seemed to disappear for a few days entirely right after the split, leading me to think for a little while that I had pulled a real Homer Simpson and bought something that promptly expired. Of course, CSCO was rising during this time, and that's why the option went up in price. But I wonder whether the stock split let me eke a little bit more out of the option play. So, this is my new experiment: watch call options right before a stock split and see whether they drop in price in accordance with the split (this is assuming it's a real split and not a share distribution). If they don't, then this might be a way to exploit true investor confusion (kind of like when people bought stock in Marvel Comics post-BK, or when good news comes out about TCI (symbol: TCOMA) and the share price for Transcontinental Realty (symbol: TCI) rises until people realize they've just bought the wrong stock).

To: JT who wrote (11392)	1/7/1998 10:46:00 PM
From: TheInvestor	Read Replies (3) \| Respond to of 77400

Yu: I am not funny just factual, not like you dreaming aboute big dips in a mega company like CSCO. LOL. LOL. LOL. Now who is laughing out load. All you shorters will resort to any tactic to bully a stock like CSCO to meet your personnal needs. I know all this dirty tactics and I am not convinced. If the market drops, if another company reports bad earnings, if and only if that happens will CSCO dip down with the tech sector. But that is a passing thing and the stock will bounce back, sometimes in a matter of hours. You all must be expecting a market collapse to meet your needs. If the chinese market has its way you shorters will be happy. But I for one, think we investors in US and Euorope should ignore the Chinese market. Let the chinese work out their problems, and then and only then reconsider doing business with them. In fact, just a few days ago folks on this thread were very bullish. Now, what happened did you shorters scare them away or you just used to be long on the stock and decided to turn ugly and short the stock. Anyway you need to check this out: techstocks.com Make sure you read the description section of this page. TI