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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Rick Escher who wrote (3696)	3/16/1998 1:43:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 18016

I'm not one to give advice on options, but for what it's worth, 90% of all options expire worthless. In other words, the person writing them pockets the money, not the one buying. Based on this, you'd be better off writing puts and at least stand a chance of gaining the premium if nothing else. I've played them over the past couple years and won more than I've lost, but I've given it up simply because it's more work than it's worth. To be really good at it you have to be nimble --- and that's difficult if you're not a professional. Just my take. Pat

To: Rick Escher who wrote (3696)	3/16/1998 9:31:00 AM
From: Brett Nelson	Respond to of 18016

Dear Rick - If I understand your post correctly, there may be one miscalculation. If the June 40 calls are trading for $4.90, then $4900 will buy you 10, not 100 calls (since each contract covers 100 shares of stock). As such , if the stock trades to $45.59, your profit would be only $690. Last observation, options are a wasting assset,meaning that their value decays over time. If you buy the stock and it remains flat, you have lost nothing but the opportunity cost on your funds. With options, if the price is not above $44.90 by expiration, you will have lost the entire premium. Good luck, Brett