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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?


To: Knighty Tin who wrote (26137)2/20/1998 9:38:00 PM
From: Thomas M.  Read Replies (2) | Respond to of 132070
 
He mentioned SUNW, MO, and Loral, I believe. The strategy was to buy the stock and sell a LEAP. You buy SUNW for $40, sell the '00 45 LEAP for $10. If the stock is above 45 in 2 years, you make 50%. You don't lose until SUNW goes below 30. The biggest negative I see is you give up the home-run upside that makes tech stocks so enticing. His main point was that implied volatility in LEAPs is too high right now, so sell volatility.

Tom