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 : Semi-Equips - Buy when BLOOD is running in the streets! -- Ignore unavailable to you. Want to Upgrade?

To: Mason Barge who wrote (4396)	1/12/1998 4:24:00 PM
From: Investor2	Read Replies (1) \| Respond to of 10921

biz.yahoo.com DRESDEN, Germany, Jan 12 (Reuters) - Siemens AG (OTC BB:SMAWY - news; SIEG.F) and Motorola Inc (NYSE:MOT - news) said on Monday the expect a new joint development center to yield technology that sharply increases productivity and reduces costs in the production of computer chips in two to three years. The companies said they would invest 1.5 billion marks ($822.5 million) to develop technology to produce semiconductors on 300 millimetre wafers, instead of the 200 millimetre wafers used today.

To: Mason Barge who wrote (4396)	1/12/1998 8:03:00 PM
From: Jay M. Harris	Respond to of 10921

Mason, here is a live example of using an equity collar to reduce a high net worth individuals risk. We employ this strategy at my employer. Note that this is purely risk management and NOT speculation! John Doe receives a $1,000,000 restricted stock grant of his employer's XYZ stock which he has to hold for 3 years. One of our risk managers will write a European Call option on the stock and buy a put. Hence, John Doe can preserve the $1,000,000 value of the restricted stock grant regardless of which direction the underlying stock moves. The equity collar hedges the risk inherent in XYZ stock regardless of the market or company performance. Once the collar is turned on our private banker lends John Doe $1,000,000 for 7% which is collateralized with the value of the restricted stock collar. John Doe happily transfers the $1,000,000 from our private banker to me and I construct a domestic diversified equity portfolio for long term growth. When his $1,000,000 restricted stock vests he either sells the stock and pays off the private banker or keeps the stock and sets up a new collar. There are many creative uses for options with respect to risk management. I agree with you that many use options to attain leverage with which they speculate. This is not my game. Good luck to those who play. Many times we read of examples in the news media of those who played unsuccessfully. Hope this helps, Jay