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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: SFgymrat who wrote (44990)	4/20/1998 11:55:00 PM
From: AlanH	Read Replies (3) \| Respond to of 61433

Bought 40 QQAEJ May 50 calls today at 1/4 and am hoping for a one bagger. Should I place a GTC order to sell at 1/2 or should I hold on for more? Any comments welcome. I'm also long ASND in my IRA. May 50C's are pretty aggressive. (So, you're probably assuming that profit occurs even if ASND doesn't cross 50?) Given the assumption that ASND will rise, another approach might offer similar reward with less risk: Buy Jun 50C's, wait for appreciation and lock profits by selling (short) May 50C's. Although you'll sell some of your upside, you will have a greater time horizon (ie., two months), and you may recoup the original cost of the Jun calls. Here's a real-world example: earlier this month I purchased May 40C's @ $1. More recently, I sold (short) APR 40C's @ $1.50. Last week, I covered (ie, bought them back) @ $.50. As you can see, the profit from APR 40C paid for the MAY 40C's (excluding commission). And, the May 40C's are still in play -- although some were liquidated today ~ $4. In general, this requires that a broker has authorized you to create spreads (and that you have adequate cash to satisfy Fed requirements). In your case, since ASND is in your IRA you may have added flexibility. Good luck.